Business Energy Market Update: April 2026

As we move into April, the state of the energy market could be much worse than it currently stands. At the beginning of the month, day ahead power was trading at £106/MWh, up from £97/MWh on 2 March, and gas was at 125p/therm up from 99p.

Of course, spot trading isn't where the focus should be right now, and as we look further out, the market is adjusting to a new norm of increased competition for supply. In addition, President Trump's flip flopping on the war's end keeps the market guessing. and so far has prevented a huge spike. Compared with the start of March when the conflict was relatively new, there is only a £20/MWh premium on wholesale prices carried by all forward contracts for power out to 2027, with winter 2026 seeing a peak at just over £100/MWh, before falling back to around £80 MWh.

Gas prices follow a similar curve but with a premium of around 30% on the previous month's close and a high of 91p/therm for winter this year. Things could be a lot worse.

I should note that despite the hyperbole in the news regarding the severity of the energy shock to the global economy, gas prices have not yet surged in any way as severely as they did in 2022. As a point of interest, gas for winter '25 was trading far higher in January of that year (at 116p/therm) as cold weather and increased continental demand pushed prices up at that time.

As mentioned, some of the cautious optimism and the absence of a runaway market can be attributed to the continued talk of an American exit from almost the start of the conflict. As recently as 1 April, Mr Trump appeared to separate the re-opening of the Straight of Hormuz, a deal with Tehran, and the ending of hostilities - opening the possibility of a US exit in a matter of weeks. On the same day, Iran confirmed it too was seeking an end to conflict in the Middle East, although it is seeking a number of guarantees the US seems unlikely to grant.

Closer to home, Ed Miliband has resisted calls to allow further licences to extract oil and gas from the North Sea, claiming it will do nothing to reduce the cost of energy. Despite pressure from influential trade bodies - including Greg Jackson, the boss of Octopus, and his own constituents - Ed has held firm on his net zero mission, saying the suggestion more drilling will reduce prices “is totally false”.

Most of the infrastructure needed to support further extraction in the North Sea already exists, and whilst some in the media are claiming deposits such as the huge Jackdaw gas field could make the UK energy independent by this winter, any extra capacity in the coming months and years will ease the stress elsewhere in the global energy system, helping to alleviate prices. As a bonus, millions of pounds that currently leaves the pockets of UK consumers and businesses to go overseas would instead land in Labours coffers to be spent on vital issues closer to home.

Despite what some may think about Ed's net zero policies, he was on the money earlier in the month when he wrote to energy suppliers and brokers urging them to act in the best interests of their customers. In letters sent directly to suppliers and an open letter to TPIs, Ed warned of price gouging and selling inappropriate tariffs, while asking for contracts to be fair, transparent and fully justifiable. He also called for shorter term, more flexible products to be released where possible to support vulnerable small businesses. Well done Ed!

As ever, the team at Clear Utility Solutions are on hand to help and advise on all things utility so please get in touch on our usual channels if we can be of assistance!