UK Energy Market Update – Gas and Electricity Prices are falling, but so is stability – 10th June 2025

Prices are falling — but so is stability. Now’s the time to act.

After months of elevated gas and electricity costs, the wholesale market has shown a clear retreat from the highs of mid-February. While this offers a welcome reprieve for businesses, it’s important to understand that the underlying risks haven’t gone away — they’ve just shifted.

This week’s update explores what’s driving current price movements, what lies ahead for the UK and European energy markets, and how businesses can use this window to lock in savings and plan smarter for the future.

Gas Market: Short-Term Relief, Long-Term Uncertainty

Wholesale gas prices have softened in recent weeks, aided by a temporary easing of global pressures. But the calm is deceptive.

• European LNG supply is still lagging, currently sitting at roughly 50% of pre-2022 levels. That shortfall creates fierce competition among nations as they prepare for winter, driving the potential for price volatility over summer.

• Storage targets are aggressive — the EU is aiming to fill gas reserves to 83% by November. That means more buying activity in the coming months, which could tighten the market again.

• Geopolitical risks persist, especially with the ongoing conflict in Ukraine. Last week saw the largest drone attack by Russia since the war began, and peace talks remain stalled.

On the other hand, US LNG exports are ramping up, with new terminals expected to come online ahead of schedule — a medium-term positive, but unlikely to ease immediate pressures.

Power Market: Renewables Gain Ground, But Risks Remain

Electricity prices have also dropped recently, thanks in part to favourable policy and weather conditions:

• The UK government has tripled its Clean Industry Bonus Scheme, boosting support for offshore wind development to over £500 million.

• Major wind farm projects like Rampion 2 and Dogger Bank D have received the green light, adding 4.7 GW of future capacity.

However, it’s not all smooth sailing. Drought forecasts are raising concerns about reduced output from both renewable and nuclear energy sources this summer — a reminder that climate volatility can affect even the greenest of grids.

Global Factors Driving Volatility

Several external dynamics are adding to the complexity:

• China’s economic slowdown, worsened by trade tariffs, is weighing on global demand but also casting uncertainty over recovery timelines.

• US-EU policy tensions, particularly around the EU’s plans to phase out Russian gas by 2027 and the Carbon Border Adjustment Mechanism (CBAM), are shaking confidence in long-term energy investments.

• Climate unpredictability is now a constant wildcard in both production and pricing strategies.

In short, the global energy market is operating on a knife edge — and while today’s prices may feel like a relief, there’s no guarantee they’ll last.

Bright Edge Recommendation: Act While the Market Is in Your Favour

For businesses with energy contracts expiring within the next 12 months, this is a key opportunity to secure a better deal — and protect against future volatility.

We recommend locking in a minimum 24-month contract. Why?

1. Immediate savings: Capitalise on today’s lower rates while they last

2. Strategic flexibility:

   • If prices fall again next year, we can forward-buy for the next 12-month period

   • If prices rise, you’re already protected until 2027–2029

This approach provides security, flexibility, and peace of mind — three things the current market rarely offers.

Let Bright Edge negotiate your business energy rates & see how much you could save

Contact us today to get started