Wholesale power prices in the UK have declined over the first half of 2023. This becomes even more apparent in the second quarter of the year. These lower prices have come from lower demand and falling gas prices.
Reports have shown that UK demand reached its lowest point since 2020. Recent energy data has shown that energy demand in the second quarter of the year was only 5% higher than in 2020 when energy demand severely dropped due to covid restrictions across the UK and Europe.
The drop in demand has been expected to be because of consumers altering their electricity usage habits in response to the high prices we observed in 2022. Also, there has been a lot more support and incentives for lowering energy usage which will have helped settle demand, for example, we had the demand flexibility programme as well as government help and guidance for businesses to reduce energy usage.
The wholesale market prices have reached their lowest level since 2021. Prices this summer have decreased by around 34% compared to the same period last year.
The drop in demand has resulted in energy companies reducing their prices which is a great sign for UK businesses and households who can now benefit from lower power prices.
Furthermore, the decline in gas prices has also had an effect on electricity prices this summer as well. Due to the oversupply of gas, wholesale electricity prices have decreased by 10% since May 2021 thanks to lower gas prices.
What does this mean for your business?
Overall, the UK energy market is currently experiencing a period of low demand and low wholesale electricity prices as a result. This is a great opportunity for consumers to take advantage of these favourable conditions and could help alleviate some of the financial pressure they have been facing over the past few years.
It also provides businesses with an opportunity to make better decisions when it comes to buying energy for their premises. It will be interesting to see how the market progresses over the coming months and whether these prices remain low or begins to increase again.
In the meantime, UK consumers can take advantage of these lower prices and make sure they are getting the best deal on their energy bills. It is always worth shopping around to find the best deals for your business. Additionally, if you feel you are paying too much for your energy, there could be help available so don’t hesitate to look into it. ​ ​ ​ ​ ​ ​
Overall, the UK energy market is currently experiencing a period of low demand and low wholesale electricity prices as a result. This presents an opportunity for consumers to take advantage of these favorable conditions and make sure they are getting the best deal on their energy bills. It will be interesting to see how the market progresses over the coming months and whether these prices remain low or begins to increase again. In the meantime, UK consumers should take advantage of these lower prices where possible and ensure that they are receiving the best value for money.
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