If 2024 was a year where early action paid off, 2025 told a very different story.
After reaching high levels at the start of the year, UK gas and electricity prices entered a prolonged period of decline. For many businesses, patience proved to be a valuable asset.
A Peak in Early 2025
Energy prices reached their highest point in the first quarter of 2025. This was driven by:
Winter demand
Ongoing geopolitical uncertainty
Market nervousness around international supply chains
Risk premiums built into wholesale pricing
At this stage, many businesses felt pressure to fix quickly, fearing further increases.
However, the market was already beginning to change.
Why Prices Fell
As 2025 progressed, several stabilising factors emerged:
European gas storage remained strong
LNG imports were reliable
Demand softened
Renewable generation improved at key points
These factors gradually reduced pressure on wholesale markets. Confidence returned, and prices began to drift lower.
By the second half of 2025, a clear downward trend had formed.
The Value of Waiting
Our analysis shows that during 2025, businesses that waited before fixing were significantly more likely to benefit from lower prices.
In many cases, delaying by several months resulted in:
Meaningfully reduced unit rates
Better long-term value
Improved contract flexibility
This does not mean that waiting is always advisable. Rather, it highlights the importance of understanding market direction.
In 2025, the market was correcting after an earlier peak. And patience was rewarded.
The Lesson from 2025
The main lesson from 2025 is that in a falling market, flexibility creates opportunity.
Businesses that remained informed and avoided panic decisions were often able to secure stronger deals later in the year. Timing, not just negotiation, made the difference.
