If you were hoping for a return to normalcy in UK gas prices, 2025 has one thing to say: think again. Wholesale gas prices might not be scaling the eye-watering peaks of 2022, but they’re still high by any historical measure. The new normal? Elevated costs, sharp swings, and an energy market that feels more like a casino than a predictable system.

So what’s going on? Let’s break it down.

The EU has decided it’s time to roll the dice on gas storage. Instead of rigid targets forcing member states to stockpile months in advance, Brussels now wants a more “flexible” approach—letting countries delay filling reserves to avoid summer price spikes. Sounds sensible, right?

Well, maybe. Or maybe this is just another classic case of short-term market tinkering creating long-term instability. And for the UK, which still depends on European gas flows despite all the post-Brexit chest-thumping, this is yet another headache.

Europe’s gas reserves are dwindling, and this time, there’s no easy way out. Storage levels have fallen below 50%, far earlier in the year than expected, and the continent is burning through gas at its fastest rate since the 2022 energy crisis. European governments had hoped to glide through this winter with enough reserves left to make summer refilling straightforward. That hope is now fading fast.

The EU’s strategic response? Unclear. Some countries, notably Germany, are already pushing for a relaxation of gas storage mandates, arguing that rigid targets could push prices even higher while offering little security. But the real issue runs deeper: what if Europe simply cannot refill its gas storage this summer? What happens if market conditions, geopolitical factors, and logistical constraints combine to make this a crisis that money alone cannot solve?

The implications are severe—particularly for the UK, which remains reliant on European gas flows despite its LNG capabilities.

The European Commission is once again flirting with the idea of a temporary gas price cap—a move that would, in theory, shield its industries from soaring energy costs and level the playing field against the U.S. But history tells us that price caps in energy markets rarely end well, and for the UK, the ripple effects could be profound.

Let’s break it down.

The UK’s wholesale energy market is entering yet another phase of turbulence. The last two years have been dominated by shocks—Russia’s war in Ukraine, soaring LNG prices, emergency government interventions, and a scramble to keep the lights on without breaking the bank. But now, as we enter 2025, the chaos has given way to something even more unsettling: uncertainty.

Wholesale prices may have stabilised from their crisis peaks, but the road ahead is anything but smooth. Europe’s energy system is shifting, and the UK is caught in the middle of a rapidly evolving geopolitical and economic puzzle. The balance of power in gas, oil, and electricity markets is changing, and the UK must navigate a landscape where the old assumptions about stability, supply, and cost no longer hold.

If you run a business in the UK, chances are you’ve been burned by rising energy costs, opaque supplier practices, or the rollercoaster that is the wholesale energy market. You’re not alone. The UK’s energy regulatory framework, overseen by Ofgem, has become an unwieldy beast—too slow to react, too tied up in bureaucracy, and too often behind the curve. Now, the government wants to reform it. The question is: will it be the radical overhaul the market needs, or just another layer of complexity?

There’s a quiet revolution happening in the UK’s energy market, but you’d be forgiven for missing it amid the usual noise of economic forecasts, net-zero debates, and the latest geopolitical spats. Two seemingly separate developments—the approval of P415 regulation, allowing new players into the wholesale energy market, and the government’s push for Small Modular Reactors (SMRs)—are setting the stage for a transformation.

But the real question is: will these changes actually deliver lower prices and greater energy security, or are we just setting ourselves up for another round of cost overruns and regulatory chaos?

There’s a growing sense that the political winds are shifting. Across the world, climate policies that once seemed inevitable are facing serious pushback. Trump is back in office, promising to supercharge fossil fuels and withdraw (again) from the Paris Agreement. Right-wing parties across Europe are making gains on platforms that include rolling back green regulations. In the UK, investment in renewables is stagnating, and court rulings have put the future of key North Sea oil and gas projects in doubt.

So what happens if the UK follows this global trend? What if we start backtracking on climate action? If you’re an energy investor, a consumer, or, well, someone who cares about how much their electricity bill costs, the answer isn’t pretty.

UK businesses are still being squeezed on energy costs. The crisis of 2022 may have eased, but the damage lingers—small businesses are still paying thousands more a year for electricity and gas than they were before. Pubs, retailers, and manufacturers are all feeling the pressure, with many barely breaking even.

And yet, the government does… nothing.

It’s not as though solutions don’t exist. In fact, they’re staring ministers in the face. Some could be implemented tonight. Others would take months. The real fixes? They require actual planning. That’s where the problem lies—Westminster doesn’t do long-term thinking.

Donald Trump is back, and so is his signature chaos. His latest grand plan? A radical “solution” for Gaza—displacing Palestinians and redeveloping the territory as a “Middle Eastern Riviera.” The reaction from global leaders has been swift and almost universally negative. But beyond the geopolitical fallout, there’s another, more immediate concern: energy markets.

In an era where the UK and Europe are already navigating volatile gas prices and fragile supply chains, Trump’s Gaza gambit threatens to send wholesale energy costs spiraling once again. If conflict erupts across the Middle East, if LNG shipping routes through the Suez Canal are disrupted, and if US-Europe relations take another hit, energy markets could be in for a painful shock.

The UK and European energy markets are at an inflection point. While short-term softness in power and gas prices offers some relief, medium-term risks remain skewed to the upside. With German storage subsidies, shifting weather patterns, and geopolitical uncertainties in play, the coming weeks will test market resilience.

For years, the UK’s electricity market has been stuck in the past. Despite the rise of smart meters, dynamic tariffs, and an increasingly flexible grid, the market has still relied on outdated estimated usage profiles rather than actual real-time consumption. That’s right: even in 2024, most consumers—especially households—are billed based on historic averages rather than the electricity they actually use at any given moment.

Now, that’s about to change. Market-Wide Half-Hourly Settlement (MHHS) is set to overhaul the UK’s electricity market by requiring every single customer, from households to industrial users, to be settled based on their actual half-hourly energy usage. The rationale is clear: more accurate billing, better price signals, and a system that rewards consumers for using electricity when it’s cheapest and greenest.

But here’s the question nobody seems to be asking: What if this turns out to be a massive regulatory headache that doesn’t actually lower costs?

For years, the UK’s electricity market has been running on outdated mechanics—an archaic system where most customers, including businesses, are billed on historic usage estimates rather than real-time consumption. Despite the rise of smart meters, dynamic tariffs, and an increasingly flexible grid, the industry has been stuck in the past. And let’s be honest: Ofgem, the regulator responsible for ensuring a fair and efficient market, has not exactly been a beacon of competence when it comes to delivering reforms that work in practice.

Enter Market-Wide Half-Hourly Settlement (MHHS), the latest attempt to drag the energy market into the modern era. In theory, it’s a game-changer—every customer, from SMEs to industrial giants, will be settled based on their actual half-hourly energy usage. The promise? More accurate billing, sharper price signals, and a system that rewards businesses for using electricity when it’s cheapest and greenest.

But will this deliver the savings and efficiencies the industry so desperately needs? Or is this yet another overhyped reform that will shift costs around rather than lower them? If history is any guide, businesses should be sceptical.