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 scan the UK energy market. Our goal is to cut through the noise and deliver the key developments that will impact your business's bottom line, all explained in simple, actionable terms.
This weeks developments are:
UK Inflation Stuck at 3.8%, Squeezing Business Margins with High Fuel and Loan Costs
A New Way to Earn From Your Energy? Ofgem Proposes a Simpler 'Flexibility' Market
The 'Zombie' Cost on Your Energy Bill: Why You're Still Paying for a Defunct Green Scheme
This Week's B2B Market Pulse - Renewables for the win… again!
Six More "Hidden Gem" Stories You Might Have Missed
LATEST DEVELOPMENTS
The Guardian
Image source: Gemini / Meet George
The Spark: Stubborn inflation holding at 3.8% signals that persistent cost pressures on fuel, food, and borrowing are set to continue squeezing business margins.
The details:
* The UK's annual inflation rate (CPI) was unchanged at 3.8% in August, remaining almost double the Bank of England's 2% target.
* Rising prices for petrol and diesel, alongside continued food price inflation (which climbed to 5.1%), offset falling air fares to keep the headline rate flat.
* In response, the Bank of England is widely expected to keep interest rates on hold at 4%, maintaining higher borrowing costs for businesses and consumers.
* Core inflation, which excludes volatile energy and food prices, fell slightly from 3.8% to 3.6%, a small sign of easing underlying price pressures.
Why it matters: Don't be fooled by the 'unchanged' headline – for businesses, this is a story of sustained pain. The real-world impact isn't the 3.8% figure itself, but its composition. Rising road fuel costs directly inflate your operational expenses, from delivery fleets to employee travel. Most importantly, this stubbornness means the Bank of England must keep interest rates higher for longer, making the cost of borrowing for expansion, equipment, or even managing cash flow a significant drag on your P&L for the foreseeable future.
What you can do:
Stress-test your cash flow: Model your finances for the next two quarters assuming interest rates remain at or above 4%. Can your business comfortably service its debts?
Review your fuel costs: With petrol and diesel prices climbing again, audit your fleet's fuel efficiency and check if your current fuel card provider is still offering the most competitive rate.
Talk to key suppliers: Proactively ask your critical suppliers about their price expectations for the next 3-6 months to anticipate cost increases rather than reacting to them.
Ofgem
Image source: Gemini / Meet George
The Spark: Ofgem is creating a new central rulebook that could make it much simpler for your business to get paid for reducing its electricity use during peak times.
The details:
Ofgem is establishing a new role called the 'Market Facilitator' to standardize the fragmented local and national 'flexibility' markets.
This new role will be managed by Elexon, the existing administrator of the UK's electricity balancing and settlement system.
The goal is to create a common set of rules and align the various schemes run by local Distribution Network Operators (DNOs) and the National Electricity System Operator (NESO).
This move is currently at the consultation stage, focusing on the governance and licence condition changes required to bring the Market Facilitator into operation.
Why it matters: Let's translate the jargon. 'Flexibility markets' are where the grid pays businesses to temporarily reduce their electricity demand to help keep the system stable. Right now, accessing these schemes is a bit of a postcode lottery, with different rules and platforms depending on your local network operator. This new 'Market Facilitator' is the first major step towards creating a single, national rulebook. For a business with multiple sites or flexible assets like EV chargers or refrigeration, this is a game-changer. It signals the market is maturing from a complex niche into a more accessible, mainstream revenue opportunity, making it easier for businesses to move from being passive energy consumers to active, paid participants in the grid.
What you can do:
Conduct an internal audit of your 'flexible assets': Identify any significant energy-using equipment (like HVAC, pumps, or industrial machinery) whose operation could be shifted by an hour or two without major disruption.
Ask your energy supplier or consultant: 'What is your strategy for helping us access flexibility schemes, and how will this new Market Facilitator role simplify the process for us?'
If you're planning to invest in on-site generation, battery storage, or EV charging, ensure your business case includes potential future revenue from providing flexibility services to the grid.
Ofgem
Image source: Gemini / Meet George
The Spark: A routine Ofgem data release highlights the 'zombie costs' from a closed green energy scheme that are still being charged on your business electricity bills today.
The details:
Ofgem has published its quarterly report on the Feed-in Tariff (FIT) scheme for the period of 1 April to 30 June 2025.
The report details the 'levelisation' process, which is how the costs of the FIT scheme are redistributed among all licensed electricity suppliers.
Although the FIT scheme closed to new applicants in March 2019, businesses with existing accredited solar panels or other small-scale renewables continue to receive payments.
These payments are funded by all UK electricity consumers, appearing as a non-commodity or third-party cost (TPC) on every business energy bill.
Why it matters: What does 'levelisation' actually mean for your business? In plain English, it's the mechanism Ofgem uses to ensure the multi-million-pound cost of the old Feed-in Tariff scheme is spread evenly across all energy suppliers, and therefore, across all of their customers. While the FIT scheme was crucial for kick-starting small-scale renewables, its legacy is a long-term cost baked into your bills for years to come. This report is a stark reminder that a significant portion of your business's energy spend has nothing to do with the wholesale price of power and everything to do with the long-tail cost of historical government policies.
What you can do:
Review your latest electricity bill for the 'Feed-in Tariff' (FIT) line item, usually found under the non-commodity or third-party costs section, to quantify its direct impact on your P&L.
When forecasting your next budget, ask your energy supplier or broker for a full breakdown and projection of all non-commodity costs to avoid being surprised by these mandatory charges.
If your business receives FIT payments for on-site generation, double-check that you have submitted up-to-date meter readings to your FIT Licensee to ensure you are being paid correctly.
LATEST MARKET NUMBERS
⚡ B2B Market Pulse
(Note: As we skipped last week's pulse, we've omitted the usual percentage changes to avoid confusion. The directional indicators reflect the change from our last report two weeks ago.)
Wholesale Electricity Price (weekly avg.): 6.20 p/kWh (🔻 Down) - A significant fall in carbon prices combined with strong renewable output has pushed wholesale electricity costs to their lowest point in over a month.
Wholesale Gas Price: 2.74 p/kWh (📈 Up) - Gas prices ticked up slightly but remained stable, having minimal impact on the electricity market, which was dominated by other factors.
UK Carbon Price (UKA): £52.52 per tonne (🔻 Down) - The carbon market saw a significant correction downwards, providing a crucial tailwind that helped lower overall power prices.
Wind + Solar Generation (Share of UK Mix): 57.2% (📈 Up) - It was another blockbuster week for renewables, which provided well over half of the UK's entire electricity supply, keeping downward pressure on prices.
The Meet George Take
Two weeks ago, we talked about the tug-of-war between cheap renewables and expensive carbon costs. This week, that tension snapped. The market was driven by two powerful forces now pulling in the same direction: another massive week for wind and solar generation was supercharged by a significant drop in the UK's carbon price.
For businesses, this is a textbook example of a prime procurement window. The headwind from non-commodity costs has temporarily turned into a tailwind, creating ideal conditions for locking in a new contract. This alignment is rare and highlights the new reality of the market: understanding the interplay between weather and carbon policy is now just as important as tracking the price of gas.
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