UK Energy Market Trends 2024: Gas and Electricity Prices, Insights, and Tips for Businesses
2024 Energy Market Review: What Businesses Need to Know
The energy market in 2024 was nothing short of dynamic. From fluctuating gas and electricity prices to the impact of geopolitical events and unpredictable weather patterns, the year brought challenges and opportunities for UK businesses.
In this review, we break down the trends that shaped the UK energy market, provide insights for decision-making, and offer a glimpse into 2025.
Key Highlights of 2024
- Gas Prices: Averaged 82.50p/therm, with sharp rises during colder months and supply challenges.
- Electricity Prices: Averaged £74.87/MWh, reflecting the influence of renewable energy fluctuations and rising gas costs.
- Geopolitical Tensions: Events such as the Russia-Ukraine conflict and Middle Eastern unrest drove market volatility.
- Weather Patterns: Colder-than-average periods, particularly in the winter months, increased heating demand.
- Renewables: Wind generation played a key role, with lower output driving reliance on gas-fired power plants.
Month-by-Month Analysis
January – A Cautious Start
- Gas peaked at 89.00p/therm due to cold weather and limited exports.
- Electricity averaged £80.00/MWh, with high wind generation stabilising costs.
February – A Mixed Bag
- Gas prices eased mid-month to 56.25p/therm but closed higher due to colder weather.
- Electricity prices rose to £70.00/MWh, reflecting reduced wind speeds.
March – Supply Pressures
- Gas averaged 67.35p/therm, with a mid-month peak of 75.20p/therm.
- Electricity saw £69.50/MWh on average, with low wind output driving reliance on gas.
April to June – Volatile Spring
- April: Gas prices fluctuated between 63.50p/therm and 83.50p/therm due to supply disruptions.
- May: Electricity peaked at £75.00/MWh, driven by reduced wind and higher demand.
- June: Gas rose to 84.50p/therm, with geopolitical risks adding pressure.
July to September – Summer Stability with Spikes
- Wind generation improved in July, lowering electricity prices briefly to £64.00/MWh.
- Gas surged in September to 93.33p/therm, driven by colder weather and supply constraints.
October and November – Winter Pressures
- Gas prices hit 121.90p/therm in November, reflecting record heating demand.
- Electricity reached a high of £113.00/MWh, driven by reduced renewables.
Year in Review: Trends and Insights
2024 was shaped by:
- Geopolitical Challenges: Uncertainty from the Russia-Ukraine conflict and Middle Eastern tensions kept markets volatile.
- Renewable Dependence: Wind and solar generation played a growing role, but periods of low output highlighted the reliance on gas-fired plants.
- Colder Winters: These drove demand spikes, particularly in Q4.
Frequently Asked Questions (FAQs)
1. When was the cheapest time of the year for energy renewals in 2024?
The cheapest time for energy renewals in 2024 was mid-February when gas prices dipped to 56.25p/therm and electricity prices fell to £52.70/MWh. This was driven by mild weather and strong renewable output, easing demand.
2. How can I keep on top of market updates?
taying informed is key. At The Smart Energy Company, we provide daily, weekly, and monthly market reports to ensure our clients are always up to date. Subscribe to our free market updates or bookmark our Latest Energy Market News page for regular insights.
3. When is the best time to renew my energy contract?
The best time to renew depends on market conditions, your current contract's end date, and energy demand trends. Historically, early spring and summer tend to offer lower prices due to reduced demand. Get in touch with us for personalised advice based on live market data.
4. Why do gas and electricity prices fluctuate so much?
Energy prices are influenced by several factors, including weather, geopolitical events, supply constraints, and renewable energy output. For example, colder weather increases heating demand, while reduced wind speeds raise reliance on gas-fired power.
5. How can I make sure I get the best deal when renewing?
Working with a trusted energy consultant is crucial. At The Smart Energy Company, we analyse live market data, compare prices from over 25 suppliers, and negotiate on your behalf to secure the best deal. Send us your latest bill to get started.
6. What trends are expected for energy prices in 2025?
We anticipate more stability in electricity prices as renewable energy investments increase. However, geopolitical tensions and climate unpredictability could continue to affect gas prices. Stay tuned for our regular market updates and sign up to updates to ensure you're ahead of the game!
Looking Ahead: Forecast for 2025
As we move into 2025, several trends are likely to shape the market:
- Renewable Growth: Increased investments in wind and solar are expected to stabilise electricity prices during peak demand periods.
- Weather Uncertainty: Climate unpredictability will continue to drive seasonal price fluctuations.
- Geopolitical Tensions: Ongoing global conflicts could disrupt supply chains, particularly for gas.
- Storage Innovations: Advances in energy storage could reduce reliance on gas during low renewable output periods.
Conclusion: 2024 in Retrospect
2024 was a challenging yet insightful year for the UK energy market. Businesses faced significant volatility, but those who stayed informed were better prepared to manage costs.
At The Smart Energy Company, we provide expert insights and tailored solutions to help you navigate these complex markets. Whether you’re looking to renew your contract or explore new options, we’re here to help.
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