Market Report September 2025

Despite ongoing heavy maintenance at Norwegian North Sea facilities reducing European gas supply, mild and windy weather, strong French nuclear output, and steady LNG deliveries are keeping short-term markets well balanced and stable. Longer-term contracts remain under pressure amid reports that OPEC+ may discuss increasing oil production this month, alongside expectations of rising LNG (Liquified Natural Gas) output from the US and Qatar. Unless the US LNG supply is disrupted or Russian gas imports fall sharply due to potential new US sanctions, the downtrend is likely to continue, with autumn weather becoming the key driver; as warm, windy conditions could accelerate the decline, however, lower European gas storage levels compared with 2023 and 2024 are expected to limit the downside.

There are several upcoming industry charges that will affect all non-domestic customers in the UK which all businesses need to prepare for. These charges are determined by UK energy policy and industry bodies, not by individual suppliers, to pay for the national grid and future power projects. The Nuclear RAB Levy  is coming into effect on the 1st November 2025 – The Nuclear RAB Levy has been set up to finance new nuclear power projects (which were not fully costed/funded as proposed by the Government), including Sizewell C, which will, in the long run (allegedly), reduce the overall cost of nuclear power to UK customers and give the UK a stable, low-carbon option. This will affect all UK non-domestic (import) customers, regardless of your supplier. The quarter 4, 2025 Nuclear RAB rate is much higher than industry reports forecasted. Early estimates were around £0.30/MWh (0.03p kWh), which would mean a few pounds per household per year. However, because the scheme’s start date was brought forward, and because of the financing of the project itself, the rate for November-December 2025 has been set at £3.455/MWh (0.3455p kWh) – this is now fixed for all suppliers! TNUoS (Transmission Network Use of System) charges are also increasing from 1 April 2026 – TNUoS charges fund all upgrades to the transmission network so electricity can move efficiently around the UK. Ofgem have announced that TNUoS charges are set to significantly increase next year. The exact value and full impact of the increased TNUoS charges are not yet known, but it is important to heed the advanced notice to help your business plan for these additional costs.

IN OTHER NEWS:

Big business faces £450K rise in energy costs – New forecasts from Cornwall Insight warn that large energy users not covered by Government relief schemes could see their non-commodity costs – also known as third-party charges (TPCs) – soar by £450,000 per year by 2030. These extra costs fund everything from transmission upgrades to new nuclear projects and are tacked on top of the actual cost of electricity. The warning shot is clear: retailers, water utilities and transport firms could be hit hardest, with no way to dodge the looming charges – most of which will be funnelled through rising standing charges, not usage-based fees.

Is Reeves being forced to cut energy prices? Chancellor predicted to step in and try to cut energy bills in the Budget. Chancellor Rachel Reeves is drawing up plans to cut household energy bills in a bid to ease the cost of living and reset Labour’s economic message, The Telegraph reports. Reeves told Cabinet last week that she had instructed Treasury officials to explore options to bring down bills ahead of her first Budget in November. All options are said to be on the table — including possible changes to VAT and green levies.

UK retail sales rose 3.1% in August – Driven by lower interest rates and sunny weather, with strong demand for food, furniture, and back-to-school computers. However, retailers fear speculation about tax rises could weigh on consumer confidence and spending in the weeks ahead.

EU considering accelerating the phase-out of Russian fossil fuels  – Due to recent pressure from the United States, the European Commission chief said yesterday that the EU is considering accelerating the phase-out of Russian fossil fuels, including gas, currently scheduled for the end of 2027 as part of new sanctions against Moscow.

A third LNG shipment from Russia’s sanctioned Arctic LNG 2 project arrived in China on Tuesday – This follows earlier deliveries in late August and over the weekend, the latter coming just days after President Putin’s visit to China. The facility, majority-owned by Novatek (60%), has a planned annual output of 19.8 million tons, though Western sanctions have cast doubt on its future.