UK Business Energy Market Review: Q1 2025
The first quarter of 2025 brought the energy market rollercoaster we've come to expect — but with a welcome twist: prices fell in March after a rocky start to the year.
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If you’re managing energy costs for your business, this update breaks down what happened, why it matters, and whether now is a smart time to lock in a deal.
๐ Key Highlights (Q1 2025 at a Glance)
- ๐จ Gas prices jumped in January but fell back in March thanks to mild weather and strong LNG flows.
- โก Electricity prices mirrored gas — peaking in January, easing in February, and dropping again in March.
- ๐ข๏ธ Oil prices were volatile, caught between sanctions and shifting global demand.
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โ Good news for businesses: Prices ended Q1 lower than they started, creating an opportunity to fix contracts before summer volatility kicks in.
๐ Quarterly Price Review
| Month | Avg Gas (p/th) | Avg Power (£/MWh | Avg Oil ($/bbl) |
|---|---|---|---|
| January | 122.86 | 124.35 | 76.50 |
| February | 124.39 | 107.74 | 72.89 |
| March | 101.86 | 99.99 | ~74.00 est. |
๐บ January: Prices surged due to cold weather and tight renewable output.
๐ป February: Power prices eased as wind picked up; gas stayed high on cold snaps.
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โ March: Milder temps + strong supply = price drops across the board.
โ ๏ธ What Drove the Market?
๐ค๏ธ Weather Trends
- January brought freezing spells that lifted demand and prices.
- February and March were milder than normal, cutting heating needs and easing pressure on the grid.
- Wind generation was more consistent in February and March, helping keep power prices down.
๐ Geopolitical & Policy Shocks
- Russian LNG disruptions and Red Sea shipping delays stirred the gas market early in Q1.
- Tensions in Ukraine caused mid-month spikes in March, but peace talks helped settle nerves.
- U.S. tariffs and OPEC+ policies added volatility in oil — but didn’t spiral.
โก UK Supply & Infrastructure
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- LNG flows into Europe remained strong throughout Q1.
- Norwegian gas exports held steady despite minor outages.
- UK nuclear plants returned from maintenance in March, boosting electricity supply.
๐ What Does This Mean for My Business?๏ปฟ
๐ Contract ends within 3 months?
Now is an excellent time to fix.
March brought the lowest energy prices of the year so far, and April could offer a short window before summer demand or market shocks push rates higher.
โ Secure a fixed deal now to avoid paying more later.
โณ Contracts Ending in 3โ6 Months?
Start preparing now.
Track prices over the coming weeks and be ready to strike if the downward trend continues — or reverse course if prices start climbing again.
๐ฌ Sign up for weekly market updates so you don’t miss your best moment to act.
๐๏ธ Contracts Ending in 6+ Months?
No need to rush — but don’t go quiet.
Use this time to monitor trends, understand your options, and make sure you’re not caught out by sudden market movements in Q2 or Q3.
๐ง A strategy review now could save you time, money, and stress later.
๐ฌ Expert Business Insight
“Prices are lower than they were at the start of the year – now is the time to review.”
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“With geopolitical risks still looming, don’t assume this dip will last.”
Energy markets can change fast. Even a mild spring doesn’t guarantee a calm summer. A short call could save you thousands.
๐ Thinking of switching or renewing?
We’ll compare over 28 suppliers for you — fast, free, and jargon-free.
๐ฎ What to Watch in Q2
- โ๏ธ Will colder weather return unexpectedly in April?
- ๐ Will prices hold or bounce back before summer demand rises?
- ๐ Will ceasefire talks between Russia and Ukraine progress — or collapse?
- ๐ข๏ธ Will OPEC+ increase oil production and trigger market movement?
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Staying alert in Q2 will be key to avoiding future cost spikes.
๐ Don’t wait for the market to bounce back๏ปฟ
Secure your fixed price while rates are favourable.
๐ Call:
0151 459 3358
โ๏ธ Email:
info@smart-energy.uk
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