The UK energy market has been undergoing a massive change in the last five years, having experienced a high of wholesale gas prices in 2022, and returning to more normal and albeit gradual price falling in 2024. Now, as we enter 2025, we have many businesses owner is asking similar questions. Are energy prices UK 2025 settling down? Will my bills still increase if the wholesale market now settles down? If I do need to act, how can I make sure I do not overpay?
This blog will provide you a clear, expert-based view on the UK energy market 2025, but more so explain what these changes signal for your business – from wholesale pricing to rogue and obscured charges – and how E for Energy can help illuminate the way forward.

The State of the UK Energy Market Entering 2025

2024 closed with cautious optimism. Widespread business energy rates UK have fallen significantly from their all-time highs, though they are still somewhat higher than ever before the 2021 spikes. Many businesses could not see any reduction in bills, as all the other non-energy “charges” and levies kept increasing.

The wider world remains a determining factor:

• Diversifying gas supplies by importing LNG has lessened risks on relying so much on Russian gas (even after they have lessened their production dramatically).
  
• Renewables provide a much higher percentage to the UK grid, there remain challenges over storage and intermittency.
  
• Geopolitical tensions remain a significant threat for remaining unpredictable risk in commodity markets.
  

In the UK, Ofgem decreased their price caps providing some respite to household’s electricity and gas supplies, however, commercial users are outside any such safeguard. With government support schemes to taper off, businesses now must find solutions for how they will manage costs pretty much on their own.

Wholesale Price Trends in 2025: Stabilisation with Caveats

Analysts widely expect energy prices UK 2025 to stabilise — good news for businesses tired of volatility. However, stabilisation does not mean costs will return to the ultra-low levels seen in the 2010s.

Main factors that influence wholesale prices for clients:

• Weather variability, for example, if there are cold winters and/or heatwave summer months this could impact the demand.

• Growing renewable generation with wind and solar, however, low wind conditions, could see gas demand increase again.

• Competition for LNG cargoes; Europe and Asia are both competing for the same LNG, with gas demand the same globally.

For companies, prices will dip and stabilize in the long run, and there are opportunities for locking in longer-term contracts at stable prices but only when the timing is right. Taking advantage of product prices in shoulder months (spring and autumn) can open procurement windows for buyer possibilities.

The Hidden Driver: Third-Party Charges & Taxes in 2025

Even if wholesale prices plateau, the non-energy portion of your bill is rising. In some cases, it already accounts for more than 60% of a business electricity bill.

Key components to watch:

• Climate Change Levy (CCL): Scheduled to increase again in April 2025. Even businesses using renewable tariffs are subject to this.
  
• DUoS & TNUoS Charges: Distribution and transmission costs are being restructured, potentially hitting businesses operating at peak demand hours harder.
  
• Green Levies: Costs linked to the UK energy transition — funding renewable projects and grid modernisation — are being passed onto end users.
  
• VAT: Generally applied at 20% for businesses (5% for certain exemptions).
  

These charges are non-negotiable, but they can be managed strategically. For example, shifting demand away from peak times can reduce exposure to DUoS red-band charges.

Sector Specific Impacts: The Importance of Context

Not all business sectors will be affected equally by the changes in UK energy trends 2025.

• Hospitality and Retail: On high operation daily high, potentially exposed to increasing DUoS charges.
  
• Manufacturing: Energy intensive therefore any charge increase even small at per unit level will impact margins.
  
• Data Centres: Reliance on reliability of supply; regularly on fixed contract but must manage their CCL carefully.
  
• Hotels and Leisure: Demand peaks at busy times = increased exposure to non-energy charges.
  

Insight: It is now imperative to consider a procurement strategy that is bespoke and tailored – what works for a retailer will not work for a data centre.

Key Risks Businesses Must Watch in 2025

Several risks could derail the outlook despite a trend of stabilisation:

1. Geopolitical shocks – continual conflicts (in Ukraine, Middle East) could tighten gas supply.
   
2. Policy shifts – with elections on the horizon, new carbon pricing or subsidy cuts could impact costs.
   
3. Infrastructure delays – delays to renewables, nuclear or other alternative technologies can increase reliance on fossil fuels.
   
4. Supplier exits – unexpected contract disruptions can occur if smaller suppliers leave the market.
   

These circumstances exemplify why ongoing flexibility and expert monitoring are just as important as getting low unit rates.

Business Opportunities in 2025

The good news? Business will have several opportunities to thrive in 2025:

• Smart Meter Data: Businesses which work off half-hourly data can optimise demand and ensure minimizing charges for their businesses.
  
• Flexible Contracts: A flexible procurement strategy with fixed and flexible elements means they can manage their certainty of price as well as flexibility to take advantage of opportunities.
  
• Efficiency Investments: Compared to previous years, with higher baseline prices, payback times are quicker for LED lighting installations, HVAC crossovers and investments in insulation.
  
• Green PPAs: With the increasing popularity of Power Purchase Agreements, large energy users can purchase energy from a renewable generator on a regular basis (typically the transactions will be monthly).
  
• Carbon Strategy Aligned: More businesses are developing the future of energy in UK strategy using one as part of their ESG reporting, which will likely provide impetus of growth for brand and investor confidence.
  

How E for Energy Helps You Plan For 2025

Understanding market signals is one thing; converting market signals into business energy savings in the UK is another. E for Energy helps you to:

• Procurement Strategy: Understand when you should contract, based on active market data.
  
• Supplier Understanding: Understand which suppliers have the lowest unit rate.
  
• Third-Party Charge Management: Identify how to assist in reducing DUoS and CCL implications by providing tailored advice.
  
• Industry Specific: Create solutions for hotels, manufacturers, retailers, and data centres.
  
• Ongoing support: Identify risks on an ongoing basis and help mitigate and manage these by pre-empting contract changes.
  

With detailed advice, businesses can move from being a passive bill payer and develop as an active energy manager.

Conclusion

UK energy trends 2025 will not be a replication of previous energy crises, nor will it see a return to “cheap power.” What will be a constant will be stability with complexity; predictable wholesale prices and escalating charges from third parties, with ongoing risks.

The companies that succeed will be those that:

1. Lock in competitive rates at the right time.
   
2. Manage non-energy charges proactively.
   
3. Design strategies specific to their industry.
   
4. Utilize professional support.
   

At E for Energy, we take the complexity and make it simple – assisting you to drive value, avoid costs, and plan for the future.