As of the 4th of November, Gas and Electricity Year Ahead Wholesale costs were lower than in last month’s report but higher than last week. Oil remains stable in the region of $64 a barrel, as OPEC+ continues to announce monthly increases in production.
It has been another month where energy markets assessed the status of local and global supply and demand concerns, but also looked at the potential impacts of conflicts and political decisions. Overall, there is probably a more optimistic outlook than in recent months.
EU Gas Storage remains low but at levels which give confidence, especially with the mild start to the heating season, when Gas use could potentially have been very high. Measures taken by the US and the EU against Russia, designed to restrict their income from energy sales, have been absorbed into prices. Although there has been some fighting, the ceasefire in Gaza is holding. China and the US met to discuss trade and appear to have found agreement, likely avoiding a trade war which would impact on the global economy and have a knock-on effect for energy costs.
Wind’s contribution to generation was a high 29% in October and a higher 43% in the last week. The Winter Outlook report, which looks at Electricity supplies, is positive, with the availability of more generation and Battery Storage.
The energy industry has changed how it recovers Electricity Distribution, Transmission and Balancing costs, under the Targeted Charging Review. This has moved some charges away from being based on the energy used and billed in the unit rate, to fixed charges incorporated within the Standing Charge or as separate items. This should give both the customer and the industry a more accurate way of calculating budgets, but the change has become noticeable within energy bills and created concern.
From April 2025 customers will have seen an increase in Transmission costs with an expectation of further increases from April 2026. Distribution costs are a little more complicated with the average fixed annual cost decreasing across networks from April 2025, remaining similar in 2026. Another element, the Available Capacity (AC), increased significantly for most from April 2025, with small reductions in 2026. This does mean that by managing the Agreed Supply Capacity, there is an opportunity to reduce the AC cost and potentially lower the Band which determines Transmission and Distribution fixed charges.
Balancing costs, which pay to avoid power cuts are increasing and the Energy Intensive Industries (EII) charge, which currently provides relief from various industry costs for EII customers at 60%, is increasing to 90% from April 2026.
Indigo Swan works closely with energy suppliers to help all our customers understand and manage changes.
Please contact us on 0333 320 0475 to discuss options or to get a latest update.
On the 4th of November, the Gas Year Ahead Wholesale cost was 80.60p/th, down from 82.24p/th in last month’s report and 18% less than 2024. Prices are higher than last week.
Despite daily price swings, there is a general downward trend. EU Gas Storage remains low at 83% full, which is considerably lower than 2024. The effect on energy prices is probably less than previous years due to the increase of LNG supplies and the industry becoming used to managing with reduced Russian Gas. However, in the event of a prolonged period of very low temperatures, and Storage levels becoming depleted, then markets will likely react as thoughts turn to buying Gas through 2026 for the winter 2026/2027.
LNG shipments to Europe have been high with little competition from Asia. Within the last week, issues at the US Freeport LNG terminal reduced Exports, which added a little pressure to prices, as did the comments that the US may take military action against Nigeria, who also Export LNG.
The EU has confirmed a ban on the receipt of Russian LNG from January 2027 and are looking to ban all Gas from 2028. This could impact on energy costs through 2026, depending on a number of factors, including Storage levels.
We would encourage those with Gas and Electricity contracts that are due to end in the next few months and potentially further out, to engage with Indigo Swan and monitor positions closely.
On the 4th of November, the Electricity Year Ahead Wholesale cost was £78.49/MWh, down from £79.09/MWh in last month’s report and 2% less than 2024. Prices are higher than last week.
Electricity Wholesale prices continue to track the trend for Gas due to its use for generation and higher cost as a fuel. Gas prices have generally been moving lower as the outlook for supplies through the winter has improved. A prolonged period of below average temperatures either in the UK or across Europe could add pressure to both Gas and Electricity prices, as could any unexpected supply outages, as we have recently seen at a US LNG terminal.
In October the contribution from the Electricity Interconnectors with Europe was 15% of our supplies. Wind was 29% and below the 31% from Gas. In the last week Wind was 43%, reducing the need from other sources. UK Nuclear routinely generates just over 10%, which although small by comparison to Wind and Gas, it is generally reliable which is why the government continues to look at options for smaller Nuclear units, as well as the construction of Sizewell C. Investment in Battery Storage is increasing, which stores excess cheaper power, to be available on demand when for example, Renewables are low or demand peaks.
We would encourage those with Gas and Electricity contracts that are due to end in the next few months and potentially further out, to engage with Indigo Swan and monitor positions closely.
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