Weekly UK Energy Market Update: Wholesale Gas and Power (4th November 2024)

In this week's UK energy market update, the UK wholesale gas and power markets are influenced by a mix of geopolitical tensions, seasonal shifts, and advancements in infrastructure and technology. Here’s a closer look at the latest developments and trends.

Wholesale Gas Market - 4th November 2024

Wholesale Gas Market Update

The UK gas market is experiencing a bearish trend due to higher-than-expected storage levels across Europe. The EU has exceeded its 90% storage target, which, combined with unseasonably mild temperatures, has reduced the need for gas withdrawals for heating. Additionally, news surrounding a potential Azeri gas deal contributed to bearish sentiment, although reports were later refuted.

On the bullish side, geopolitical risks continue to pose potential supply concerns. Middle Eastern tensions escalated as Iran vowed an “unimaginable” response to recent Israeli actions, heightening fears of a broader regional conflict. Reports of a halted deal with Azerbaijan to replace Russian gas flows via Ukraine have also kept supply uncertainties on the radar.

Wholesale Power Market - 4th November 2024

Wholesale Power Market Overview

The UK power market sees mixed trends this week, with bearish influences stemming from infrastructure developments and renewable commitments. European battery capacity is projected to grow six-fold to 40GW by 2030, driven by new projects in the UK, Italy, and Germany, which will enhance grid stability and renewable energy integration. Additionally, the UK’s Autumn Budget pledged £125 million to accelerate grid connections and support new infrastructure, promising future improvements in grid reliability and power accessibility.

Conversely, bullish pressures are emerging due to rising energy demand. European data centre growth, projected to double over the next decade, is expected to drive increased demand for French electricity imports to Southern Europe, potentially tightening power availability for the UK. The UK’s push to phase out internal combustion engine vehicles, with new incentives for electric vehicles, is also expected to increase future demand on the power grid.

What Does This Mean for Your Business?

These trends underscore the importance of proactive energy strategies as the market continues to fluctuate. While European gas storage levels and infrastructure developments are positive signs, rising energy demand from data centre expansion and electric vehicles could place upward pressure on prices over time. Businesses may benefit from consulting with energy experts to ensure they are prepared for potential supply shifts and can optimise their energy procurement in response.

Stay Informed with National Business Energy

Keeping up with market changes is essential for businesses aiming to optimise their energy use and costs. National Business Energy provides insights and expert guidance to help clients navigate these shifts effectively. Stay tuned for more updates and visit National Business Energy to learn how we can support your business’s energy efficiency goals in a dynamic market.