Produced in Association with SERIES 22 / Module 07 Energy Purchasing
Energy purchasing Peter Leyland, head of training at GLEG Ltd B
usinesses continue to be at risk of the volatile energy markets, resulting in a lack of certainty around the
‘right time to purchase’ energy contracts in fear of either a) another market escalation or b) purchasing at a higher-than-necessary rate. The lack of definable, predictable models (due to geopolitical uncertainties) also adds a layer of complication into the mix. In this article, we will explore
the key fundamental factors driving elevated volatility in UK
and European energy markets, including the supply pressures that have shaped recent trends. We will also examine the current market landscape, the challenges businesses face in energy procurement, and practical strategies for navigating these conditions. By understanding how to mitigate risks effectively, businesses can better prepare for 2025 and beyond, ensuring they strike the right balance between securing energy too early or too late.
Recent UK Energy Price Trends Historical electricity commodity prices typically ranged between 4p/kWh and 6p/kWh, which in the 2022 energy crisis escalated to 60 p/kWh. Recently in the UK there has been a large range-bound market, a recognisable measure of volatility with prices ranging from 7p/kWh to 9.2p/kWh. The chart below reflects the recent changes. Despite electricity prices
climbing above 60p/kWh in August 2022, markets have since been showing some refinement towards the end of 2023. Businesses face the ever-present concern that any complication in LNG injection could
Figure 1 – Recent fluctuations in UK electricity prices, showing a range-bound market with values between 7p/kWh and 9.2p/kWh
For details on how to obtain your Energy Institute CPD Certificate, see ENTRY FORM and details on page 22
EIBI | FEBRUARY 2025
Produced in Association with
EIBI | OCTOBER 2022
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