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.
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.
📌 Key Highlights (Q1 2025 at a Glance)
- 💨 Gas prices jumped in January but fell back in March thanks to mild weather and strong LNG flows.
- ⚡ Electricity prices mirrored gas — peaking in January, easing in February, and dropping again in March.
- 🛢️ Oil prices were volatile, caught between sanctions and shifting global demand.
✅ Good news for businesses: Prices ended Q1 lower than they started, creating an opportunity to fix contracts before summer volatility kicks in.
📊 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. |
🔺 January: Prices surged due to cold weather and tight renewable output.
🔻 February: Power prices eased as wind picked up; gas stayed high on cold snaps.
✅ March: Milder temps + strong supply = price drops across the board.
⚠️ What Drove the Market?
🌤️ 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.
🌍 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.
⚡ UK Supply & Infrastructure
- 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.
📉 What Does This Mean for My Business?
🕒 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.
✅ Secure a fixed deal now to avoid paying more later.
⏳ Contracts Ending in 3–6 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.
📬 Sign up for weekly market updates so you don’t miss your best moment to act.
🗓️ 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.
🧠 A strategy review now could save you time, money, and stress later.
💬 Expert Business Insight
“Prices are lower than they were at the start of the year – now is the time to review.”
“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.
👉 Thinking of switching or renewing?
We’ll compare over 28 suppliers for you — fast, free, and jargon-free.
🔮 What to Watch in Q2
- ❄️ Will colder weather return unexpectedly in April?
- 📉 Will prices hold or bounce back before summer demand rises?
- 🌍 Will ceasefire talks between Russia and Ukraine progress — or collapse?
- 🛢️ Will OPEC+ increase oil production and trigger market movement?
Staying alert in Q2 will be key to avoiding future cost spikes.
🔒 Don’t wait for the market to bounce back
Secure your fixed price while rates are favourable.
📞 Call:
0151 459 3358
✉️ Email:
info@smart-energy.uk
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