Energy Update — 12 February 2026

Market Update

Weather and geopolitical factors continue to drive the market.

The previous below-average temperatures have been replaced by milder, wetter weather. Reducing gas for heat demand and boosting renewable generation.

The primary weather risk is a Sudden Stratospheric Warming (SSW) event currently in development. This atmospheric disruption is likely to pull freezing Arctic air southward, potentially triggering a "Beast from the East" weather pattern in late March or early April. Uncertainty exists around the severity and whether this system will land over Europe, North America, or Asia.

The US/Iran conflict, potentially leading to a wider Middle East confrontation, remains the key geopolitical risk. The ongoing dialogue between the parties has led to commodity costs softening. Any escalation in tensions will immediately raise prices.

Both Uk and European gas reserves are at 35%, with good levels of supply from both European gas fields and LNG cargoes from the US and Gulf states.

Business Energy Costs

Since the start of the year, increasing gas costs have driven up contract rates. Electricity costs have recently fallen, and this is reflected in contract offers. The most recent sample with an average rate of 23ppkW isn’t reflective of the wider market. Many of those customers were larger users, hence the £3.86 per day average standing charge.

The recently announced increased transmission (TNUOS) charges mean that many pubs will find their electricity bills increasing by several hundred pounds. Suppliers are currently deciding:-

1. How much they add to new contract rates.
2. Whether they will increase the costs within existing contracts.

However, given the scale of the increase, it seems likely that these additional charges will be added to existing “fixed” contracts.

		Commodity Cost	Av Unit Rate	Av Standing/Ch
Electricity	08/01/2026	7.4p	25.6p	82p
	02/02/2026	7.6p	24.2p	£1.62
	13/02/2026	7.1p	23p	£3.86
Gas	08/01/2026	2.3p	5.5p	£1.86
	02/02/2026	2.6p	5.7p	£1.31
	13/02/2026	2.6p	6p	£1.15

Global gas supplies are set to exceed demand, pushing down prices. For electricity, any reduction in commodity costs looks set to be negated by increasing non-commodity costs, with costs likely to rise.

In the short to medium term, the key risks are:-

• Sudden Stratospheric Warming causing extreme cold, spiking demand and prices.
• Military action between Iran and the US, leading to Iran closing the Strait of Hormuz, blocking 25% of global oil and gas.

Supplier Challenges

The only noteworthy change to the previously noted issues is an increasing trend toward disconnections, with suppliers wanting payments of 50% - 75% of the debt to prevent disconnection or reconnect.

Nationwide Energy offers the support you need to make your next energy contract transition smoother, deal with supplier issues, or review your energy consumption.

Graph produced by Cornwall Insight in conjunction with Drax Energy Solutions, 12/02/2026.