Will business energy prices go up or down?

If you searched for a forecast, we are not going to give you one. Nobody can tell you with confidence whether business energy prices will be higher or lower in six or twelve months, and any site that claims otherwise is guessing. What follows instead is what actually moves wholesale prices, the indicators that are published and updated regularly, and how to make a fixing decision that does not depend on guessing right.

Why won’t we forecast prices?

Because the things that move wholesale energy prices are not reliably predictable. Weather, gas storage levels, generator and pipeline outages, and geopolitical events all feed into wholesale prices, sometimes very quickly, and history shows how badly wrong forecasts can be when several of them move together. Our guide to business energy prices since 2020 sets out, using DESNZ and Ofgem’s own published figures, how sharply prices rose through the 2021 to 2022 energy crisis, a move that mainstream forecasts at the time did not anticipate. Treat any confident prediction, from us or anyone else, with scepticism.

That said, understanding what drives prices, and knowing where to check what the market currently expects, puts you in a much better position than guessing.

What actually drives wholesale energy prices?

Our guide to how wholesale energy prices work covers this in full, including how gas usually sets the electricity price. In short, the main drivers are:

• Gas supply and storage levels, since GB still relies on gas-fired power stations to meet a large share of demand
• Weather, both cold snaps that raise heating and electricity demand, and low wind or solar output that increases how much gas generation is needed
• Interconnector flows, since GB imports and exports electricity with continental Europe
• Planned and unplanned outages at power stations, gas fields or pipelines
• Carbon prices under the UK Emissions Trading Scheme, which raise the cost of running gas and coal generation
• Geopolitical events affecting global gas supply, which can move prices quickly and are, by nature, hard to see coming

None of these move on a predictable schedule, which is exactly why we do not attempt to forecast where they will take prices next.

What published indicators can you actually check?

You do not need a forecast to see what the market currently thinks. Several official sources publish current data and near-term market pricing, updated on a set schedule:

Indicator	What it shows	Published by	How often
Wholesale electricity prices	GB day-ahead electricity price	Elexon (via our market data page)	Daily
Wholesale gas prices	GB gas System Average Price	National Gas (via our market data page)	Daily
Forward delivery contracts	Weekly average price for electricity and gas delivered in future periods	Ofgem	Weekly, published monthly
Quarterly Energy Prices	Average prices actually paid by non-domestic consumers, by size band	DESNZ	Quarterly
Business Energy Price Index	How far business prices and wholesale costs have moved since before the energy crisis	Our own index, built from DESNZ and market data	Updated with each data refresh

Ofgem’s forward delivery contract prices are the closest thing to a market view of future prices, since they show what buyers and sellers are currently agreeing for energy delivered later. Ofgem’s own data portal is explicit that these indicators are “not intended for use or to be relied on for any commercial purposes”, which is a useful reminder: they describe current market pricing, not a guarantee of what will happen, and the exact contracts behind the average are not published in detail. Treat a rising or falling forward curve as a sign of current market sentiment, not a promise.

DESNZ’s Quarterly Energy Prices release is the only one of these based on prices businesses actually paid, rather than wholesale trading. It is published four times a year, with the next release following the Q1 2026 figures already on our market data hub.

How often should you actually check these?

There is little value in watching daily wholesale prices move if you are not actively buying energy that day. A sensible routine is to check the forward and quarterly indicators when you are within a few months of a renewal or switching decision, rather than tracking daily figures year-round. Our contract renewal guide covers when that window typically opens for you.

Why do published forecasts sometimes turn out wrong?

Wholesale energy forecasting is genuinely difficult, and that is not a failure of any one analyst or publication. A forecast is a model built on assumptions about weather, demand, supply and geopolitics that hold at the time it is made. When one of those assumptions breaks, for example a sudden reduction in pipeline gas supply into Europe, a major outage, or an unusually cold or windless spell, the model’s starting point is wrong and its output goes with it.

The scale of the 2021 to 2022 energy crisis illustrates this well. DESNZ’s own Quarterly Energy Prices statistics, and the Business Energy Price Index we publish on our market data hub, show how far average business prices moved over a short period during that time, a shift that was far larger than mainstream forecasts had anticipated only months before. Our business energy prices since 2020 guide sets out the timeline using DESNZ and Ofgem figures.

None of this means published indicators are worthless. Ofgem’s forward market data and DESNZ’s actual price statistics are the best publicly available view of where the market and real prices sit right now. It means treating any single-point prediction, including one implied by a forward curve, as a snapshot of current expectations rather than a guarantee.

Does the household energy price cap tell you anything?

Indirectly, yes, but it does not apply to your business. Ofgem resets the domestic price cap every quarter based partly on wholesale costs, and its published summaries explain which cost movements drove the change. Business energy is not covered by the price cap at all, and your supplier is not required to follow its direction. But because both markets buy from the same wholesale gas and electricity markets, a domestic price cap statement that flags a wholesale rise or fall is describing the same underlying trend that eventually reaches business quotes too, even though the timing and the exact costs included are different.

How should you think about fixing without a forecast?

Base the decision on how much risk your business can absorb, not on a guess about where prices are going. Our guide to fixed versus flexible business energy contracts covers the contract types in detail. The short version for a forecasting-free decision:

1. Work out what a price shock would do to you. If a sudden rise in your unit rate would cause real cash flow problems, that is a strong argument for fixing regardless of where you think the market is heading, because a fixed contract removes that risk rather than betting on it.
2. Consider your appetite and capacity for risk. Flexible and variable arrangements ask you to accept market movement in exchange for the chance of a lower average price. That trade-off is about your business’s tolerance for uncertainty, not about who can predict the market best.
3. Look at timing, not direction. Rather than trying to time a low point in the market, focus on things you can actually control: your contract end date, how early you can agree a new deal, and avoiding a rushed renewal on deemed or out-of-contract rates. Our guide on when to switch business energy explains the window to work in.
4. Get quotes and compare like for like. A quote reflects the market at the point it is priced. Comparing several quotes over a short period tells you more about your actual options than trying to guess whether the market will be higher or lower next month.
5. Ask what is actually fixed. Some contracts fix only the energy element and pass through changes in network or policy costs. Check this before assuming a “fixed” contract removes all price risk; our non-commodity costs guide explains what those other costs are.

An example of risk-based thinking, not a forecast

Say a small business has a fixed monthly budget with little spare cash, and its current contract has two months left to run. It cannot say whether wholesale prices will be higher or lower in six months, and does not try to. Instead, it decides that a 20 percent unplanned rise in its energy bill would cause a real problem for cash flow, so it starts gathering quotes early, understands its notice period, and agrees a new fixed contract before its current one lapses onto a more expensive deemed or out-of-contract rate. This is an illustration of the reasoning process, not a recommendation for any specific business, and it does not depend on guessing which way the market will move.

A larger energy user with its own finance team and the ability to absorb some month-to-month variation might instead choose a flexible contract, accepting more uncertainty in exchange for the chance to buy into a falling market over time. Neither choice is “right”; each reflects a different tolerance for risk, which is the actual decision to make.

What if someone offers you a confident prediction?

Be cautious of any broker, supplier or comparison site that tells you prices will definitely rise or fall, especially if it is used to pressure a quick decision. Genuine market indicators, like the ones listed above, come with important caveats about how reliable they are and what they do and do not cover. A confident, unqualified prediction usually tells you more about the person making it than about the market.

If a prediction is being used to rush you into signing before you have had a chance to compare quotes or check your notice period, treat that as a warning sign rather than a reason to act quickly. There is no cooling-off period on most business energy contracts once you have agreed one, so a rushed decision based on someone else’s confident guess about the market can be hard to undo. Take the time to read the principal terms, understand the contract length you are committing to, and check the exit terms before you sign, whatever anyone tells you prices are about to do.

Where to go from here

If you want to understand the market mechanics behind these numbers, start with how wholesale energy prices work. If you want the long view on how far prices have already moved, see business energy prices since 2020. And if you are ready to see what suppliers are currently quoting rather than trying to predict it, you can compare business energy quotes with us.

Frequently asked questions