Energy Update — 14 August 2025

Market Update

Today, the world’s attention is focused on Alaska for the Trump-Putin summit.

Ukraine and Europe aren’t involved and are concerned that this will lead to concessions by Trump, which they oppose.

Many are asking what it will mean for European Energy costs as we move closer to winter. While the outcome of these talks and the possibility of a just peace is unknown, a few things are clear:-

• Putin’s demands are unacceptable to both Ukraine and Europe.
• Any attempt by Trump to undermine a fair settlement will further fracture his relationship with Europe.
• While this summit is a major coup for Putin. Only a fair settlement would open the door to the possibility of Europe once again taking Russian oil & gas.
  • If Trump feels that Putin has not negotiated with him in good faith, there remains the threat of further sanctions on Russia and countries that buy their oil & gas.

Consequently, there is little scope for this summit or further negotiations to improve gas availability. Potentially, the outcome will mean a greater tightening of supply globally, raising prices.

Other factors influencing supply & demand have been favourable, with commodity costs softening over the last few weeks.

European and UK gas storage has improved, with the EU at 73% and the UK at 45% of capacity. Europe is progressing towards its target of achieving 90% by 1stNovember. Interestingly, Europe achieved 90% on 19th August last year, so much remains to be done.

Business Energy Costs

		Commodity Cost	Av Unit Rate	Av Standing/C
Electricity	17/07/2025	8p	23.4p	73p
	31/07/2025	8p	24.7p	£1.15
	14/08/2025	7.8p	22.8p	86p
Gas	17/07/2025	3p	6.5p	94p
	31/07/2025	3p	6.3p	80p
	14/08/2025	2.8p	6.2p	£1.18

Energy commodity costs have fallen, and the average electricity contract rate is lower by 2ppkW. This is the first significant change in some months and is to be welcomed. It may also present an opportunity to fix any renewal contract at lower costs.

The future direction of contract rates will be influenced by several factors beyond those noted above. The continued good availability of gas and renewable generation is key.

While costs show signs of improvement, many other energy-related challenges continue to present themselves. Pubs are subjected to repeated high-pressure sales calls. Increasingly calling from abroad, to avoid regulation, unscrupulous sales agents claim to be your supplier, urging business owners to agree a new contract. Sometimes, promising to switch suppliers and leave any debt behind. Such scams expose customers to several risks, including the contract being submitted with a fraudulent change of tenancy.

These callers emphasise the urgent need to act and typically only offer 1 or 2 suppliers and generally 3 – 5-year terms. These long contracts have large commissions, significantly increasing the customer's energy costs.

Alternatively, Nationwide Energy Consultants, as a trusted partner, can be relied upon to offer customer-focused advice. We offer the “Big 6” alongside smaller suppliers who have an offer well-suited to the needs of hospitality.

Graph produced by Cornwall Insight in conjunction with Drax Energy Solutions, 14/08/2025