Energy Market Update: UK Wholesale Gas and Power Trends (17th February 2025)
- Lee Guttridge
- Feb 17
- 3 min read
This week’s Energy Market Update highlights key shifts in the UK’s wholesale gas and power markets, influenced by geopolitical developments, policy changes, and energy supply concerns. Here’s what businesses need to know.
Wholesale Gas Market – Energy Market Update
The UK gas market remains subject to bearish and bullish trends that could impact pricing and procurement strategies.
Bearish Trends:
US-Russia Peace Talks: The US has initiated peace negotiations with Russia to end the three-year war with Ukraine, potentially leading to a resumption of Russian gas flows into Europe. This could help stabilise European gas supplies in the long run.
LNG Export Approvals: President Trump has approved the first US LNG export license since Biden’s pause on approvals last year. The move allows Commonwealth LNG to export to Europe, improving supply availability and easing concerns over energy security.
Bullish Trends:
Asian LNG Prices Rising: Colder weather forecasts in Asia have driven LNG prices to a one-year high, increasing competition for cargoes between Asia and Europe. This could exacerbate supply pressures for the UK and push up gas prices.
European Storage Concerns: The European gas market is expected to remain tight throughout 2025, as the region continues to move away from Russian gas and coal generation, reducing flexibility in balancing demand and supply.
Wholesale Power Market – Energy Market Update
The UK power market continues to be shaped by renewable energy initiatives, supply chain risks, and shifting demand trends.
Bearish Trends:
Clean Industry Bonus Scheme: The UK government has launched a new incentive scheme to encourage investment in offshore wind infrastructure. This initiative is expected to help scale up clean energy projects, supporting the country’s transition to renewable power.
EU Power Demand Recovery Delayed: According to the International Energy Agency (IEA), EU power demand is not expected to recover until at least 2027, signalling a prolonged period of subdued growth in electricity consumption across Europe.
Bullish Trends:
Uranium Supply Crunch: European energy companies face growing risks of a uranium shortage, which could impact nuclear power generation. With demand for nuclear energy rising, supply constraints could drive up power prices.
China’s Role in Renewable Supply Chains: The UK’s MI5 is investigating China’s increasing influence in the UK energy sector, raising concerns that potential disruptions in renewable technology supply chains could slow down the transition from fossil fuels.
What This Energy Market Update Means for UK Businesses
With peace talks potentially easing long-term gas supply concerns, businesses could see more stable energy prices in the future. However, rising LNG competition from Asia and tight European gas storage levels suggest that volatility may persist in 2025.
On the power side, government-backed incentives for offshore wind could help drive down costs in the long run. However, nuclear fuel shortages and geopolitical supply chain risks could create upward price pressure in the short term.
Stay Ahead with National Business Energy
At National Business Energy, we help businesses navigate complex market conditions with tailored energy procurement strategies. Whether you’re looking to reduce costs, explore renewables, or improve efficiency, we provide expert insights to keep you ahead of market shifts.
Stay informed with our Energy Market Update reports and visit National Business Energy to discover how we can help your business secure the best energy deals in a rapidly changing landscape.
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