UK Energy Market Report — 25 September 2026

What we’re watching today

• DESNZ’s Q2 2026 energy price data release.
• Wind generation share holding above 35% in the forecast mix.
• Escalating oil market volatility from Houthi attacks and Red Sea risks.

Headlines and what they mean

Energy prices: April to June 2026 (DESNZ)

The Department for Energy Security and Net Zero published official statistics showing average commercial electricity prices rose 6.2% year‑on‑year in Q2 2026, driven by higher wholesale gas costs and network charges. For buyers, the data confirms that recent price spikes are not a short‑term blip; budgeting for a 5‑6% uplift in the next quarter is prudent. source

Evaluation of the Boiler Upgrade Scheme, 2026 (DESNZ)

The latest evaluation reports a 12% uptake among eligible non‑domestic sites, with average annual fuel savings of £4,800 per installation. While the scheme supports decarbonisation, the modest participation suggests many firms are still hesitant, highlighting an opportunity for energy advisers to promote the financial case. source

Non‑domestic National Energy Efficiency Data Framework (ND‑NEED), 2026 (DESNZ)

ND‑NEED data shows that 42% of surveyed commercial buildings have implemented at least one energy‑efficiency measure since 2024, yet overall site‑wide energy intensity has only fallen 3% YoY. The lag indicates that many measures are low‑impact; deeper retrofits remain required to meet net‑zero targets. source

Impact of heat‑pump costs on uptake (DESNZ)

Research reveals a price elasticity of –0.45: a 10% rise in installed heat‑pump cost cuts uptake by roughly 4.5% among commercial users. With component prices stabilising, firms can anticipate a modest rebound in heat‑pump projects if financing terms improve. source

Geopolitics and global markets

Oil markets are being pushed higher by Houthi attacks that have disrupted Saudi export flows, while Red Sea shipping risks are inflating Saudi export costs. These developments feed into higher crude benchmarks, which in turn lift European diesel and gas‑linked power generation costs. The prospect of a prolonged Iran‑related conflict adds further upside risk to oil prices, reinforcing pressure on UK wholesale power markets that remain sensitive to fuel‑cost inputs. source source source

The view from the trade desk

The grid forecast shows a moderate carbon intensity of 139 gCO₂/kWh, underpinned by a strong wind contribution (35.6%) and a still‑significant gas share (31.6%). With wind at its seasonal peak, short‑term power prices may soften, but the lingering gas component means wholesale rates stay vulnerable to fuel‑price swings from the geopolitical backdrop.

What to do this week

• Review Q2 price data and adjust contract benchmarks to reflect a 5‑6% uplift.
• Prioritise contracts that include wind‑focused pricing or renewable‑energy‑of‑record (REoR) clauses.
• Accelerate heat‑pump feasibility studies while negotiating fixed‑price financing to lock in current equipment costs.
• Explore participation in the Boiler Upgrade Scheme for eligible sites to capture available subsidies.
• Engage with energy‑service providers to benchmark your site’s intensity against the ND‑NEED averages and identify high‑impact retrofits.

Bottom line

UK commercial energy buyers face a dual challenge: rising wholesale fuel costs driven by global oil market turbulence and a modest but persistent increase in domestic electricity prices. However, the current wind‑rich generation mix offers a buffer that can be leveraged through renewable‑focused contracts. Proactive procurement, targeted efficiency upgrades and strategic use of government schemes will be key to protecting margins through the coming quarter.