Navigating the UK Energy Market in 2024

If you’ve been away from the UK’s business energy scene for a while, don’t fret. We've used AI to find out the top nine most important things happening in the UK's energy markets in 2024, so that you can execute trades and contracts with all the best information at hand! Let's GO!

1. Energy Bills Discount Scheme

The UK government has introduced the Energy Bills Discount Scheme to support businesses struggling with high energy costs. This scheme provides discounts of up to £6.97/MWh for gas and £19.61/MWh for electricity for eligible non-domestic customers. Enhanced support is available for energy-intensive industries, offering significant discounts to mitigate the impact of volatile energy prices​ (GOV.UK)​.

2. Decrease in Business Energy Costs

Drax Energy Solutions forecasts a decrease in business energy costs for 2024 due to a 47% drop in wholesale energy prices since January. This is attributed to robust storage reserves, improved supply accessibility, and favourable weather conditions. However, higher third-party costs (e.g., transmission and distribution) will still keep overall bills above pre-crisis levels​ (Energy Saving Trust)​.

3. July 2024 Energy Price Cap

Ofgem has reduced the energy price cap by 7%, setting it at £1,568 annually for a typical dual-fuel household. This decrease reflects the current lower wholesale energy prices, but experts caution that prices are expected to rise again in the autumn. This adjustment aims to provide temporary relief while long-term strategies for energy efficiency are developed​ (Energy Saving Trust)​.

4. Energy Production/Consumption Trends

Recent data indicates a slight decline in primary energy consumption in the UK, with a 0.2% drop in the last quarter. Electricity generation from renewable sources reached a record high, contributing 48.9% of the total electricity generation by major power producers. This shift underscores the growing role of renewables in the UK’s energy mix​ (GOV.UK)​.

5. Support Measures for Businesses

Alongside the Energy Bills Discount Scheme, the UK government has also introduced various support measures, including a £13.6 billion relief package for business rates over the next five years, a £2.4 billion cut in fuel duty, and protection from corporation tax increases for smaller businesses. These initiatives aim to alleviate financial pressures and foster a more stable business environment​ (GOV.UK)​​​.

6. Octopus Energy's Leadership in Customer Satisfaction

Octopus Energy has been recognised for its excellent customer service, earning the highest rating on Trustpilot among UK energy suppliers. Their commitment to providing 100% renewable energy at competitive prices has made them a preferred choice for businesses looking to transition to greener energy sources​ (Expert Market)​​.

7. Cornwall Insight's Price Cap Forecasts

Cornwall Insight has predicted an increase in the energy price cap starting January 2024, driven by recent fluctuations in wholesale prices and events like the Australian LNG production strikes. This forecast highlights the need for businesses to prepare for potential price increases in the coming months​ (Cornwall Insight)​.

Note: Cornwall Insights is usually right!

8. Significant growth in renewables in 2024

The UK's renewable energy sector is poised for significant growth in 2024. Current projections indicate that renewable energy sources will continue to play a major role in the country's electricity generation. By the end of 2024, it is expected that renewables will account for a substantial portion of the energy mix, driven by policies aimed at increasing the use of wind and solar power.

Wind power is set to see a major boost, with offshore wind capacity projected to increase significantly. The UK government has plans to achieve 50 GW of offshore wind capacity by 2030, supported by financial incentives and government funding​ (National Grid)​.

9. Benefits of submitting energy meter reading

In 2024, households across the UK have been urged to submit their energy meter readings ahead of price cap changes to ensure they are billed accurately. Ofgem, the energy regulator, lowered the price cap on 1 July 2024, reducing the average annual dual-fuel bill from £1,690 to £1,568. This reduction, amounting to a £122 annual saving, follows a previous price drop in April​ (Business Energy Deals)

Stay current

That’s a wrap! Keeping up with the enegy sector is not easy, as it is everchanging and most traditional media often send us mixed, confusing signals. This list attempts to do the opposite, help you keep focus on the points that really matter!

PS. Recall how the steep rise in energy prices in 2022 took down hundreds of businesses, including some indebted providers. Don't let that happen to you!