TALKING HEADS/ STEVE ATKINS


Managing energy costs in an unpredictable market


While wholesale volatility remains a concern, the transition towards the ‘green agenda’ is fundamentally reshaping the market. Steve Atkins offers advice on how businesses can navigate these rising costs in an increasingly unpredictable global climate.


T


he UK industrial landscape is grappling with a multi-faceted energy crisis. In 2026 we are no longer reacting to market


spikes and tackling one area such as pricing. The industry has to grapple with the energy trilemma: achieving clean power, ensuring security of supply, and maintaining affordability. The shift to green energy has strong


political backing, but renewables are not a simple solution. While obviously more environmentally kind, the work that goes into a transition such as this with an outdated, centralised system to an array of energy sources, such as solar and wind, is a significant logistical challenge – not to mention, extremely costly.


While the UK’s Planning and


Infrastructure Bill (PIB) is helping to streamline this transition and bypass bureaucratic delays, businesses are likely to foot the bill of the resulting surge in construction and grid reinforcement seen in non- commodity levies. This is now a pivotal moment for the sector to consider their options.


Modernising the UK’s energy


infrastructure requires massive investment. Connecting remote offshore wind farms to the national grid involves significant construction costs, which will be passed onto consumers through regulated ‘non energy charges’ such as Transmission Network Use of System (TNUoS) tariffs. Forecasts suggest these fixed


costs will increase, with some business tariffs potentially doubling by April. Combined with the new Nuclear Regulated Asset Base (RAB) levy, these charges are expected to account for more than 60% of total electricity bills. This leaves the UK at a severe disadvantage, with average prices at 25.33 p/kWh – far above the EU average – remaining one of the most expensive environments for industry in the developed world.


Volatile landscape In addition, the geo-political climate is still impacting the wholesale market, stemming from the impact of the


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Ukraine war. The extreme peaks of 2022 when prices hit a staggering £700/MWh have now significantly reduced. However, they have settled into a higher ‘normal’. Wholesale costs now trade in a stable but elevated range of £70 to £100/MWh, nearly double the pre-crisis baseline of £40 to £70/ MWh. Furthermore, the shift from Russian pipeline gas to global Liquefied Natural Gas (LNG) means the UK is now more exposed to price competition from the US, Australia and the Middle East. Energy also remains a political


football, which is challenging for businesses that are expected to make decisions on a 10 to 30-year timescale. Certainty is a necessity for the industry to plan and grow, but it cannot be achieved through short termism and five-year political cycles. With UK electricity demand


projected to grow by 50% by 2035, driven by the rapid electrification of heat and transport, alongside the ‘Internet of Things’ (IoT), this has become increasingly important for the government to prioritise. This unprecedented strain on an already aging infrastructure also has the potential to lock higher prices in for the next decade. With politics and economics


where they are, the UK could also see green policies become watered down as the government seeks to protect businesses and keep the UK competitive – a balance of doing what is ‘right’ for the planet versus what is ‘necessary’ for survival.


Finding solutions For businesses, the shift from 40% to 60% non-commodity charges on energy invoices means that traditional procurement is no longer enough. But there are ways to help manage a high-cost future that should start now: 1. Audit and optimisation Before investing in new tech, businesses should consider where waste can be eliminated. This includes ensuring your site isn’t overpaying for capacity you don’t use – as network


proactive and provides budget certainty from the get-go – however, you need to be careful to avoid purchasing the energy at the wrong point. The ‘fix/unfix’ automation strategy is what we see the most, which uses technology to automatically lock in prices when the market dips, and is what we largely recommend, but every client is different, so it is good to take consultation on what works best. 3. On-site resilience and monetisation Looking towards self-generation


Securing long-term energy resilience requires a shift from reactive procurement to a continuous cycle of strategic optimisation


charges are now banded by usage. As we often say, ‘you can’t manage


what you don’t measure’, and submetering is a great way to collect granular data and identify when and where energy is being consumed the most across a portfolio of buildings to better understand how this can be optimised. 2. Employ flexible risk strategies The ‘one-size-fits-all’ fixed contract


is often a gamble in volatile markets, so we would always urge customers to consider more dynamic approaches. Some businesses opt for a prescriptive, cost averaging strategy, which means dipping in to the market and shifting the focus from time to time and finding what works best for the business – however, this may not suit less flexible contracts. A ‘Capital at Risk’ strategy is


through solar and battery storage will be critical in the coming years as the grid becomes more heavily congested. Charging batteries during cheap overnight periods to avoid peak daytime tariffs is becoming a standard industrial necessity. It’s also advised to look into


schemes (accredited by NESO) that offer business incentives to reduce usage during peak events. 4. Leverage relief schemes While the Energy Intensive Industries (EII) relief is well-known, the upcoming British Industrial Competitiveness Scheme (BICS), set to begin in 2027, will offer new exemptions for manufacturing ‘foundational’ industries. Early feasibility studies now will ensure you are application-ready when these windows open.


Final thoughts Securing long-term energy resilience requires a shift from reactive procurement to a continuous cycle of strategic optimisation. This starts with a rigorous audit phase to establish a baseline, followed by a culture of adaptation to ensure agility. To protect themselves from market shocks, firms must then analyse and engineer capital investments, such as on-site generation. Central to this is a robust risk management framework, providing essential price control needed to shield finances from a volatile market.▄


Steve Atkins


Head of customer experience at Consultus International


EIBI | FEBRUARY 2026


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