Business Energy Market Update: July 2025

In a dramatic contrast to May, day ahead power saw a huge swing in June.

At the start of the month, predictions for wind output were significantly above seasonal norms for the first week of June and as a result on 02/06 power was trading as low as £27/MWh. By the end of the month, this was up to £91/MWh as a combination of high temperatures and lower wind output put pressure on supplies.

Summer 25 power saw a slight downward trend during the month, as did contracts further out. The gas market saw a decline of around 9% across the board for Summer and Autumn 25, with a 5% uptick in the cost for delivery into this Winter. Contracts for next year remained relatively unchanged throughout the month, however.

In other news, North Sea gas may be set to make a comeback. Figures released for the first quarter of 2025 show a 19% increase in gas imports compared to the same period last year, partially driven by lower wind output in the same period.

With LNG imports increasingly coming under the microscope for their higher carbon emissions, it may be time for a rethink. In a recent parliamentary debate, Jesse Norman (Shadow Leader of the House of Commons) claimed LNG is up to four times more carbon intensive than domestic gasl, owing to the immense amount of energy required to chill the gas to a liquid form and ship it vast distances across the globe. In the same speech he also called for the ban on new licences to be lifted, accusing the government of committing the UK to "greater dependency on imported oil and gas at higher cost".

The UK is reliant on 47% of its energy coming from overseas and in a never-ending carousel of geo-political crises after geo-political crises, the voices clamouring for more energy security are starting to be heard. As this winter has demonstrated, we are nowhere near ready to take gas out of our energy mix and won’t be for many years to come. So it makes sense that we should source as much of our gas as possible in a way that supports UK jobs and industry, keeps prices stable and improves our energy security.

In a March press release the government announced it would be consulting on ending the Energy Profits Levy, a move that could potentially pave the way for energy companies to increase their investment in North Sea energy. However, in the same month they introduced a ban on licences to drill in new fields which fell short of an outright ban on new wells, but only by a whisker so there is still some way to go.

I wrote last year about a pioneering project to bring renewable energy from the Sahara to the shores of the UK via an innovative new interconnector. This project was slated to reduce the UK’s electricity prices by over 9% in its first year, inject £5bn into Britain’s green industries and provide 8% of the UK’s electricity needs. However, the government confirmed last month it is no longer considering a contract for difference for the scheme, rendering it financially unviable in its current form. Whilst it is incredibly disappointing that the cable will now not go ahead, the government expressed concerns over the security of the link in the current climate, although Xlinks have stated they will look to seek alternative funding.

If you have any an energy related questions or need help with any of your utilities, the team at CUS are always on hand to help.