Market Report February 2026

With lower-than-expected European gas storage levels, the latest forecasts point to a brief cold snap towards the end of February, rather than a prolonged cold wave, which have provided some relief. Gas and oil prices remain supported by escalating tensions in the Middle East, which in a worst-case scenario could lead to prolonged disruptions across oil and LNG markets which could cause rapid increases to the gas market. Power prices have fallen this month following a prompt sell-off in carbon markets, particularly in the UK, where limited liquidity and political uncertainty have increased. Longer term gas contracts remain very keen, largely due to the expected rise in global LNG supply, however, short-term volatility could increase again depending on developments in the Middle East, unexpected or even planned disruptions to the supply and late season cold weather patterns.

The upcoming increases to TUNoS charges (Transmission Network Use of System) to upgrade Britains aging energy network, have now been confirmed with material increases taking effect from April across ALL voltage levels. TNUoS is typically 5-10% of the total electricity cost on a business bill. While this removes a level of uncertainty for budgeting, it also confirms that many businesses will face meaningfully higher non-commodity electricity costs with the largest impacts at higher voltage half hourly connections, but EVERY meter will be affected. Low Voltage (LV) bands will see increases to TNUoS of typically around 40-75%, with High Voltage (HV) bands increasing by typically 50-85%, driving a significant uplift in fixed annual costs, and Extra High Voltage (EHV) the most severe, with expected increases of 40-60%, often with very large cost impacts per site and EHV1 bands increasing at a staggering, more than 100% year-on-year! Some suppliers have initially stated that they will absorb the increases for CURRENT contracts, whereas others in both fixed and flexible purchase arrangements will pass through these increases to businesses. Ensure you speak to your current supplier/broker to understand how these changes may effect your business energy costs from April.

IN OTHER NEWS:

Centrica boss warns bills will soon be higher than during the energy crisis – Chris O’Shea says bills in 2030 will be higher than during the Russian invasion of Ukraine four years ago. “Our projections show that the UK energy system will be one where, by 2030, the electricity price will be higher than it was at the peak of the Russian invasion of Ukraine.” Britain is now paying the price for years of underinvestment across the energy system. With costs rising regardless of whether the country had pursued net zero or doubled down on fossil fuels.

Why 78% of UK businesses don’t trust renewable energy claims – and what it’s costing the transition according to Tem Energy – Generators have renewable capacity. Businesses want to buy it. But somewhere between generation and procurement, credibility evaporates. The market is there. The infrastructure is there. The intent is there on both sides. There are businesses buying renewable energy right now who don’t believe they are. Because they can’t see it. Because their bills don’t show it. Because the connection between the wind farm in Scotland and the invoice on their desk is invisible. That’s not greenwashing. That’s the opposite – it’s green obscuring. It’s doing the right thing and getting zero credit for it because the proof doesn’t travel with the product. But evidence requires infrastructure. Not physical infrastructure – information infrastructure. Systems that connect generation to consumption. Platforms that timestamp, verify, and display where energy comes from in real time.

CRE and Ofgem said conditions are not currently in place to approve a new France-UK interconnector – following a February 2025 commitment to discuss the conditions required to enable a 1 GW increase. The two countries currently share 4 GW of interconnection via IFA (2 GW), IFA2 (1 GW) and ElecLink (1 GW), with several additional projects under development by private promoters.

Sustainability Spotlight: UK Government launches Local Power Plan with £1bn pledged for community renewable energy – Promised Local Power Plan from DESNZ and Great British Energy has now been published and pledges £1bn in funding for community-owned renewable energy projects across the country. The plan aims to support 1,000 local projects and is viewed as the largest public investment in community energy in the UK’s history. Community renewables are far less common in the UK than in many other European countries, therefore DESNZ aims to boost capacity and address barriers around finance and regulation.