A quick note from me (Josh):
Welcome to The George Briefing. Each week, my co-founder Lu and I use our tech-focused lens to go directly to the source of change in the UK energy market, the official publications from Ofgem and the UK Government. Our goal is to cut through the noise and deliver the key regulatory developments and changes that will impact your business's bottom line, all explained in simple, actionable terms.
This weeks developments are:
The Big Energy Trade-Off: Gov Pledges Cheaper Power, But Grid Upgrades Will Cost You Now
Beyond Saving: New Rules Will Let Your Business Sell Energy Flexibility to the Grid
This Week's B2B Market Pulse - Renewable output collapsed!
Hidden Gem Stories You Might Have Missed
LATEST DEVELOPMENTS
Department of Energy Security and Net Zero
Image source: Gemini / Meet George
The Spark: The government is framing the UK's reliance on volatile gas markets as the core reason for high business energy costs, committing to a massive build-out of clean power as the only route to long-term price stability.
The details:
Fossil Fuel Exposure: The Energy Secretary identified the UK’s dependence on gas as the “Achilles heel” of the energy system, stating it's the primary driver of high industrial electricity prices compared to European competitors.
Massive Investment Needed: A 50% increase in electricity demand is expected by 2035, while much of the grid (built in the 1960s) and half the gas fleet (over 20 years old) require urgent upgrades or replacement.
Clean Power is Cheaper: The speech highlighted that recent auction results show new solar and onshore wind are nearly 50% cheaper to build and operate than new gas-fired power stations.
Support for Business: The government is increasing support for 7,000 energy-intensive businesses to help manage current high costs, though specific details were not provided in the speech.
Why it matters: This speech is a clear political signal that the government sees no future in relying on gas to bring down costs. For a business, the key takeaway is the trade-off this creates. While the long-term goal is cheaper wholesale electricity from renewables, the immediate reality is a period of massive investment in grid infrastructure. The Secretary's admission that 'four times as much transmission infrastructure needed to be built' this decade than in the last 30 years means one thing for your P&L: expect the non-commodity portion of your energy bill, which pays for this grid upgrade, to remain high or even increase in the medium term. The promise of cheaper power in the 2030s is funded by higher network costs on your bills today.
What you can do:
Review your current energy contract's end date and model the impact of continued gas price volatility on your next renewal; the government has made it clear it does not see this risk subsiding.
Request a feasibility study and quote for on-site solar generation. The speech's strong endorsement of solar reinforces its status as a primary, government-backed tool for businesses to control long-term energy costs.
When forecasting your 2026/27 budget, instruct your finance team to factor in a likely increase in non-commodity costs (e.g., network and balancing charges) to pay for the national grid upgrades outlined in the speech.
The Retail Energy Code
Image source: Gemini / Meet George
The Spark: The rulebook for how your business can get paid for using smart tech (like EV chargers, batteries, or smart heating) is being drafted, and a major industry body is warning that the current plan could lock businesses into closed systems and kill competition before it starts.
The details:
The government's 'Smart Secure Electricity Systems' (SSES) programme will define the rules for 'Consumer-Led Flexibility' (CLF), the market for paying you to reduce or shift your energy use.
The Retail Energy Code (RECCo) is warning that the draft plan gives too much control to the grid operators (the 'BSC') and not enough to the retail side (the 'REC').
RECCo's key fear: This could lead to 'proprietary or siloed' models where your EV charger or battery manufacturer could 'lock you in' and prevent you from shopping around for the best deal for your flexibility.
RECCo is demanding a 'federated model' with formal roles for retail and consumer bodies to ensure interoperability and data portability, which is essential for a competitive market.
Why it matters: Let's translate the jargon. 'Consumer-Led Flexibility' is the industry's term for a new gold rush: paying businesses to not use power, or to feed it back from their assets (like an EV fleet or a battery). SSES is the rulebook for this new market. This document is a political turf war over who controls those rules. RECCo is rightly pointing out that if the grid operators write all the rules, they'll optimize for the grid, not for the customer. The real-world impact for your P&L is that this decision, made now, will determine if you have an open, competitive market where you can sell your flexibility to the highest bidder (us included), or if you get locked into a closed system run by your device manufacturer or a single supplier.
What you can do:
Ask about 'open standards': When buying any new smart energy asset (EV chargers, solar inverters, batteries), ask the vendor if their product uses 'open standards' (like OCPP for chargers) that allow you to switch flexibility providers.
Question your supplier: Ask your energy supplier or broker what their strategy is for 'Consumer-Led Flexibility' or 'Demand-Side Response' and how they plan to ensure you get access to the full value of your assets.
Audit your assets: Start a simple audit of your 'flexible' loads. Identify any energy-intensive equipment (EVs, refrigeration, heating, pumps) that could, in theory, be paid to shift its consumption."
LATEST MARKET NUMBERS
⚡ B2B Market Pulse
Wholesale Electricity Price (weekly avg.): 9.01 p/kWh (📈 +0.55 p/kWh / +6.5%)
Power prices continued to climb, but the extreme volatility of the previous week subsided, despite a deepening renewable drought.Wholesale Gas Price: 2.76 p/kWh (📉 -0.02 p/kWh / -0.7%)
Gas prices were perfectly flat, reinforcing that the drivers for electricity costs now lie completely outside the commodity market.UK Carbon Price (UKA): £56.36 per tonne (📈 +£0.96 / +1.7%)
Carbon costs saw a negligible rise, having no meaningful impact on the market.Wind + Solar Generation (Share of UK Mix): 13.2% (🔻 -24.5 pts / -65.0%)
Renewable output collapsed, falling to its lowest level in recent memory and forcing the grid to rely almost entirely on expensive thermal generation.
The Meet George Take
Last week, we told you the weather was in charge. This week’s data is the crucial second chapter to that story.
Renewable generation collapsed again, falling by a staggering 24.5 percentage points to a mere 13.2% of the UK mix. Based on last week’s market logic, this catastrophic drop should have triggered another 50% price spike.
It didn't. Power prices rose by a 'modest' 6.5%.
What does this actually mean for your business? It means the market has learned its lesson from last week’s shock. That 48% spike wasn't a one-off blip; it was a permanent re-pricing of risk. The market now expects this weather-driven volatility, and a new 'weather risk premium' is being baked into the baseline price.
The new normal is here: the 'floor' for electricity prices is fundamentally higher than it was 18 months ago, because it now includes the cost of insuring the grid against a 'low-wind week' at all times.
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