Energy Update — 18 September 2025

Market Update

Despite shifting political allegiances and a clearer alliance between Russia, China, and India, reflecting an anti-West/anti-US response to the Trump administration's trade sanctions and rhetoric. The factors impacting energy supply and demand remain balanced. Consequently, price movements have been modest since early August.

China’s increasing reliance on Russian pipeline gas should relieve some pressure on LNG supplies that Europe has become more reliant on over the last 3 years. Europe continued to refill its reserves which now are 81% full while UK storage is at 47%.

The current stable conditions may allow a further softening of commodity costs. However, the number of variables impacting supply and demand presents some risk.

Business Energy Costs

The increases in commodity costs in the last few weeks are much smaller than the increases in contract rates. The average electricity unit rate at 24.9ppkW is the highest this year. Reviewing the sample from which it was drawn, there is a noteworthy absence of the 21p unit rates, pulling the average down. In contrast, the gas remains within its recent range, suggesting the electricity rate is not indicative of an upward trend.

However, the increasing impact of new and existing non-commodity costs will mitigate any downward trend in electricity costs for the foreseeable future.

		Commodity Cost	Av Unit Rate	Av Standing/C
Electricity	14/08/2025	7.8p	22.8p	86p
	04/09/2025	7.6p	24.2p	£1.63
	18/09/2025	7.9p	24.9p	£1.25
Gas	14/08/2025	2.8p	6.2p	£1.18
	04/09/2025	2.7p	5.5p	£1.70
	18/09/2025	2.8p	5.9p	£1.01

Other than contract costs, supplier demands for a range of documents to process changes of tenancy are resulting in many new businesses remaining on deemed rates for months, draining their capital.

Recently, several new operators have been contacted by unscrupulous sales agents days or weeks before they take on the pub, suggesting that they must agree contracts to avoid disconnection, etc. No reputable supplier would accept contracts agreed in advance, though some much-discussed suppliers will. In one recent case, the customer thought they had agreed a 1-year fixed rate, only to discover it was 4-year variable rate contract. Should these contracts not go live, the broker is pursuing the customer for several thousand pounds in lost commission.

Prospective operators must be alert to the risk of being duped into such contracts. A supplier would not contact a customer in advance, and early contact is likely fraudulent.

Nationwide’s billing team have recently had great success, supporting customers who have been presented with bills for historic consumption. Under the back-billing rules, suppliers can’t charge for consumption that is more than a year ago. On first contact, the suppliers are adamant that this must be paid. It is only through the knowledge and skill of our billing team that these charges have been removed.

For support in making your next energy contract transition smoother, dealing with supplier issues, or help in reviewing your energy consumption, Nationwide Energy offers you the support you need.

Graph produced by Cornwall Insight in conjunction with Drax Energy Solutions, 18/09/2025