UK Business Energy Market Review: Q4 2025
Q4 2025: The Quarter That Proved Timing Is Everything
Q4 2025 was a quarter of two halves. Peace talks drove a historic repricing in November — Cal-26 gas fell 9% in a single month. Then cold weather and the Troll outage snapped prices back up in December. Add the Nuclear RAB Levy launch and Tomato Energy's collapse, and it was the most eventful quarter of the year.
⚠️ January update: Cold weather has already pushed spot gas up 11% in the first week of 2026. Q2-26 forwards (67.35p) still offer 10% savings vs current spot — but the window is narrowing.
✅ At a Glance: What Happened in Q4?
- Gas down ~5% quarter-on-quarter: from 79.31p/th (Sep) → 74.75p/th (Dec close), with a low of 65.42p mid-December.
- Power up ~8% quarter-on-quarter: from £72.26/MWh (Sep) → £81.50/MWh (Dec close), driven by cold weather and low wind.
- November delivered the biggest single-month repricing of 2025: Cal-26 gas fell 9% on Ukraine peace framework news.
- Nuclear RAB Levy launched 1st November: adding 0.3455p/kWh to all electricity bills — the first new levy since 2024.
- Tomato Energy collapsed 6th November: 14,000 customers transferred to British Gas via Ofgem's SoLR process.
🌤️ Monthly Price Snapshot
| Month | Gas (p/th) | Power (£/MWh) | MoM Direction |
|---|---|---|---|
| October | 78.97 | £75.13 | Baseline |
| November | 71.53* | £72.55* | ↓ -9% gas, ↓ -3% power |
| December | 74.75* | £81.50* | ↑ +4.5% gas, ↑ +12% power |
* Cal-26/Jan-26 forward contract closes. Market transitioned from day-ahead to near-term forwards for renewal pricing.
Key Takeaways:
- 📉 November's peace talks repricing was the best buying window of 2025 — Cal-26 gas fell 9% in a single month.
- ❄️ December's cold snap + Troll outage erased half of November's gains, pushing Jan-26 forwards back to 74.75p.
- ⚡ Power diverged from gas in December — low wind generation drove a 12% monthly increase despite modest gas rises.
- ⚠️ 65.42p on December 11th was the quarter's (and year's) best rate — it lasted only days before cold repricing began.
November's 71.53p is gone — but Q2-26 at 67.35p still offers 10% savings vs today's spot.
🔎 What Drove the Market?
🕊️ Peace Talks & Geopolitical Repricing
The biggest story of Q4. Late November brought concrete progress on a Ukraine peace framework, and markets repriced rapidly. Cal-26 gas fell 7% in a single week (Nov 24-28), with the month closing 9% lower. This was structural repricing of geopolitical risk premium — the first meaningful easing since the 2022 invasion.
❄️ Cold Weather & Demand Surge
December reminded everyone that fundamentals still matter. Cold weather across Northern Europe drove heating demand up sharply. EU storage drawdowns accelerated. Wind generation collapsed to near-zero for extended periods, forcing reliance on gas-fired power and spiking electricity prices 12% in a single month.
🔧 Troll Field Outage
Norway's Troll field — one of Europe's largest gas sources — went offline unexpectedly on December 30th. Spot gas spiked to 76.75p on panic buying before recovering. While brief, it demonstrated how quickly supply disruptions can move markets, especially when demand is already elevated.
💨 Wind Generation Volatility
Q4 saw extreme swings in wind output. November benefited from strong generation, helping keep power prices in check. December was the opposite — extended periods of low wind forced gas-fired plants to fill the gap, explaining why power prices rose 12% even as gas rose only 4.5%.
📋 Beyond Prices: What Else Happened in Q4?
☢️ Nuclear RAB Levy Launched
1 NovA new 0.3455p/kWh levy hit all electricity bills, funding nuclear infrastructure like Sizewell C. Combined with the existing EII Support Levy (0.15p/kWh), businesses now pay ~0.5p/kWh in government levies before their actual energy costs.
🍅 Tomato Energy Collapsed
6 NovTomato Energy ceased trading and entered administration, with ~14,000 customers transferred to British Gas via Ofgem's Supplier of Last Resort process. The CEO cited insufficient capital to operate in the current market.
⚡ TNUoS Increases Confirmed for April 2026
Coming Apr 2026Transmission Network Use of System (TNUoS) standing charges will increase by an average of 94% in some regions from April 2026. Depending on location and meter type, this could add £500–£5,000+ annually to standing charges.
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👉 Get My Fixed Energy Quote💡 Is Now a Good Time to Fix My Energy Contract?
Yes — Q4's volatility showed exactly why locking in matters. Those who acted in November secured rates 9% below October. Those who waited until late December paid more as cold weather repriced the market. The lesson: good prices don't wait around.
🕒 Contract Ending 0–3 months (Jan–Mar 2026)
Act now. You're in the winter window — Q1 carries seasonal premium. Current forwards (Jan-26 at 74.75p gas, £81.50 power) are elevated but could rise further if cold weather persists. Locking removes exposure to further spikes.
Get Q1 Quotes Now →⏳ Contract Ends 3–6 months (Apr–Jun 2026)
Excellent value available. Q2-26 forwards sit at 67.35p gas, £72.34 power — significantly below winter rates. This is the sweet spot: past the winter premium, before summer volatility. Get quotes now and be ready to lock on any dips.
Get Q2 Quotes — Best Value →🗓️ Contract Ends 6–12+ months (Jul 2026+)
Monitor and prepare. Summer-26 and Cal-27 forwards remain favourable (67.02p and 65.91p respectively). You have time, but don't go quiet — set a target rate and be ready to act if peace talks progress further or we see another November-style repricing.
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💬 Expert Insight from Smart Energy Co.
"Q4 proved that timing matters more than ever. Businesses who locked in during November's peace talks repricing secured rates 9% below October — and 15% below where we ended December. Those windows don't stay open long."
"The Nuclear RAB Levy adds another layer of cost that businesses need to factor in. Combined with the EII Support Levy and upcoming TNUoS increases, non-commodity costs are rising even when wholesale prices fall. Total cost analysis matters more than ever."
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🔮 Looking Ahead to Q1 2026
Here's what we're watching as we move into the new year:
❄️ Weather
Extended cold could tighten balances and push prices higher. Watch forecasts closely — January has started cold.
🕊️ Peace Talks
Any concrete progress could trigger another repricing like November. Collapse would snap premiums back.
🚢 LNG & Storage
EU storage is drawing down faster than last year. Watch for Asian competition for LNG cargoes.
⚡ TNUoS (Apr)
Standing charge increases hit in April. Factor this into your total cost calculations now.
🔍 Final Thoughts
Q4 2025 delivered the year's most dramatic price movements. November's peace talks repricing created the best buying window of 2025 — Cal-26 gas at 71.53p, down 9% in a single month. December's cold weather and Troll outage reminded everyone that fundamentals still matter, pushing prices back up to close at 74.75p.
For businesses renewing in Q1 2026, current rates carry winter premium but offer certainty against further cold-weather spikes. For Q2+ renewals, forward curves show genuine value — Q2-26 gas at 67.35p is 10% below current spot. The key lesson from Q4: good prices don't wait around. Set your target, get quotes ready, and act when the window opens.
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📥 Ready to Lock In Before Prices Rise Further?
Q2-26 forwards are still 10% below current spot — but January's cold start has already pushed prices up. The window won't stay open forever.
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