Energy Market Update – December 2025
November was a tale of two markets. Forward prices stayed fairly calm, but day-to-day costs swung wildly depending on whether the wind was blowing. We also saw the government finally put some meat on the bones of its industrial energy strategy. If you’re renewing soon, there’s a lot to think about but also some real opportunities to lock in decent rates before winter bites harder.
November in review: Why wholesale prices moved
Weather turned colder, demand went up
Not exactly shocking for November, but the drop in temperature meant more heating and higher gas demand. That pushed prices up in the first half of the month.
Wind generation was all over the place
Here’s the wild bit: on 11 November, wind turbines generated 22,711 megawatts in a single evening, a new record that powered over 22 million homes. But a week later, wind output collapsed and day-ahead power jumped 66 percent to £87.80 per megawatt hour. When the wind stops, we burn expensive gas instead. Simple as that.
Gas supply stayed reasonably strong
Plenty of LNG cargoes arrived, Norwegian pipelines kept flowing, and mild weather across Europe helped keep a lid on prices. By late November, European gas futures dipped below 30 euros per megawatt hour for the first time in over a year.
Nuclear had a wobble
The Hartlepool reactor stayed offline longer than planned, which meant less baseload power and more reliance on gas plants during low-wind periods.
Forward markets barely budged
Despite all the short-term drama, seasonal gas contracts moved up just 0.3 percent on average, and power contracts dipped 0.1 percent. That tells you the market thinks things will stay relatively stable looking ahead.
Bottom line
Day-ahead gas finished November at 75.90 pence per therm, up four percent from the week before. Day-ahead power hit £87.80 per megawatt hour, up 66 percent week-on-week. But summer 2026 power contracts? Still sitting around £70.45 per megawatt hour. Translation: short-term volatility, but longer-term prices holding steady.
Headlines your business should note
Big energy bill cuts coming for manufacturers in 2027
The government announced its British Industrial Competitiveness Scheme will slash energy bills by 25 percent for over 7,000 manufacturers starting in 2027. If you’re in automotive, aerospace, chemicals or steel, you could save around £35 per megawatt hour by being exempt from renewable subsidy costs. A consultation opened in November to iron out who qualifies.
North Sea plan: manage what we have, no new exploration
On 26 November, the government published its North Sea Future Plan. The headline: existing oil and gas fields will be managed through their lifespan, but no new licences for exploring fresh fields. There’s also a new jobs service to help workers move into clean energy roles, plus something called Transitional Energy Certificates for limited production near existing sites.
Nuclear levy now on your bill
From November, all energy bills, including yours, now carry a standing charge to fund the Sizewell C nuclear plant. This is a Regulated Asset Base levy and you can’t negotiate it away. It’s built into the system, so factor it into your budget planning.
Autumn Budget pointed toward industrial support
Chancellor Rachel Reeves delivered her second Budget on 26 November. The energy bits: a new Oil and Gas Price Mechanism replacing the current windfall tax by March 2030, and nuclear energy getting added to the Green Financing Framework. The theme was stability and growth, with clear intent to make UK industry more competitive.
What could move prices in December
What to watch | Why it matters | Possible price effect |
Winter weather | Cold weather means more heating demand and tighter gas supply | Cold snap = prices up; mild = prices down |
Wind output | When the wind blows, electricity is cheap. When it doesn’t, we burn gas and prices spike | Calm weeks = volatility; windy weeks = lower prices |
Norwegian pipeline work | Norway supplies a huge chunk of our gas. If maintenance overruns or pipes have issues, supply tightens fast | Delays = prices up |
LNG shipments | We need regular cargo deliveries because UK storage is limited. If other countries outbid us for shipments, we pay more | Good arrivals = stable; competition = prices up |
Carbon market news | Any talk of linking UK and EU carbon trading could shift prices for both power and gas | Link announced = UK carbon prices likely up |
What this means for your energy budget
December is peak winter demand territory, and we’ve already seen how quickly prices can jump when wind drops off. The positive news? Forward prices for 2026 are still well below where they were last year, and the government is actually trying to help industrial users for once.
The catch? Standing charges are creeping up with new levies like the nuclear charge, and spot prices can still go bonkers on a calm week. If you’re renewing between now and March, this is a good time to explore fixing your rate before we get deeper into winter.
How Dyce Energy turns insight into advantage
Your challenge | How Dyce helps | Benefit to you |
Timing your renewal so you don’t get caught by a price spike | We watch the wholesale markets every day and tell you when it’s a good time to lock in | You fix your rate when the market suits you, not when your contract runs out and you’re stuck |
Understanding what you’re actually paying for | We explain every charge on your bill in plain English and find contracts that cut out the avoidable costs | No surprises when the invoice lands |
Going green without jumping through hoops | 100 percent renewable electricity and carbon-neutral gas as standard, no extra paperwork | Tick your sustainability box without the hassle |
Getting someone on the phone who actually knows your account | UK-based team, Monday to Friday 9am to 5pm, no overseas call centres | Real people who understand your business and fix problems fast |
Switching without the faff | Digital switching done in as little as 48 hours | Move to Dyce and start saving without disrupting your operations |
Your action plan for December
- Dig out your contract end-date. If you’re up for renewal between January and March, get a quote now. Waiting until the last minute could mean you’re fixing when prices are higher.
- Tell us what you’re aiming for. Let us know your budget and timeline, and we’ll keep an eye on the market for you. When the numbers work, we’ll flag it.
- Ask about going green. Our renewable electricity and carbon-neutral gas options are simpler and more affordable than most businesses expect. Worth a conversation if you’re working on your sustainability credentials.
- Get a quote. Visit dyce-energy.co.uk/quote and we’ll show you what you could save with a 12 to 36 month fixed-price contract.
Markets move fast, and planning ahead makes a real difference. Let’s make sure your next contract works hard for your business.
