Business Energy Market Update: June 2026

May saw some good news in the wholesale markets, with prices generally softening over the last month with winter 2026 gas contracts showing the biggest reductions. Since the end of March, day ahead and winter 2026 gas have both fallen by around 15%, largely driven by easing concerns over disruption to global LNG supplies and growing expectations that tensions in the Middle East may not result in prolonged restrictions to shipping through the Strait of Hormuz.

Power prices have also moved lower, although by a much slimmer margin. Day-ahead power remained largely unchanged and further out, the market has responded more slowly to the movement in gas prices due to very low wind output over the last month, with winter '26 power reducing by around 5%. Despite there being plenty of sunshine during one of the sunniest springs in recent years, the UK grid still relies heavily on wind to do much of the renewable heavy lifting and this was well reflected.

Overall though, the picture is improving. Whilst wholesale prices remain significantly above the levels seen through much of 2025, the market has retreated from the peaks reached during the spring. As always, geopolitical developments remain the biggest price driver and markets continue to react sharply to events in the Middle East and any renewed threat to LNG supply routes could quickly reverse some of the recent gains. Despite the good news whimsical US foreign policy remains as unpredictable as ever and on a less positive note, European gas storage levels are currently around 40% full, significantly below the levels seen at the same point last year and this is likely to provide support to gas prices through to at least next winter as Europe continues the task of restocking inventories.

May also saw the announcement of the new July price cap and despite the reductions in wholesale prices mentioned above, it wasn’t good news for consumers. An increase of 13% from 1 July will see annual costs for a typical dual fuel household rise from £1,641 to £1,862. Regular readers will know of course that the price cap trails the wholesale market by around three months, but in this instance, even with the recent reductions, it is likely there will be a further increase in October, albeit not as severe. The good news is that current wholesale prices suggest the worst of the increases may already be behind us though, provided global events do not deliver any further surprises!

Staying on a consumer focussed theme, uptake of domestic batteries in the UK may influence wholesale energy costs in the future if Australia’s energy model can be replicated here. Battery installations for homes down under have picked up pace in recent years to the extent that stored power from domestic batteries is now able to replace gas fired generation during evening peak periods. On some occasions, wholesale electricity prices have reportedly fallen by up to 10% as battery storage absorbs cheap daytime solar power before discharging during the evening peak. In the last 12 months, Australians have installed over 415,000 home batteries, driven in part by generous government incentives, with batteries now being installed at a rate of more than 1,000 per day. As a result, gas generation across parts of Australia has fallen by around a quarter compared to the previous year. Looking closer to home, incentives such as 0% VAT on solar and battery installations, together with schemes such as ECO4, may well see sufficient uptake here for there to be a similar effect during the summer months in the UK.

It might just be time to join the green revolution. Set against the backdrop of the fabulously expensive engineering marvels that are the Coire Glas and Earba pumped storage projects, carrying a combined price tag of around £5 billion, now may be as good a time as any to join the renewables boom and grab a slice of the pie Ed Miliband is dishing out for all things green.

As always, the team at Clear Utility Solutions is on hand to offer advice, answer any questions and help secure the most competitive energy contracts for your business, so please get in touch through our usual channels.