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:
The 'Blackout Insurance' Charge Hidden On Your Energy Bill
Power Shift: Ofgem Rule Change Puts You in Control of Your Energy Data
Backing Gas: What the New Jackdaw Field Means for Your Future Bills
This Week's B2B Market Pulse - Renewables for the win… again!
Five More "Hidden Gem" Stories You Might Have Missed
LATEST DEVELOPMENTS
Department for Energy Security and Net Zero
Image source: Gemini / Meet George
The Spark: That 'Capacity Market' charge on your business energy bill isn't just jargon – it's the multi-billion-pound insurance policy you're paying for to prevent winter blackouts.
The details:
The Capacity Market (CM) is a government mechanism designed to ensure there's always enough power generation capacity available to meet peak demand, especially during winter.
It works via auctions where power plants, battery storage operators, and even large energy users (via 'Demand Side Response') are paid a retainer to be available when the grid is under stress.
The costs of these payments are recovered from electricity suppliers, who then pass them directly onto all consumers, including businesses, as a specific line item on bills.
These government-set rules define how the auctions are run, who can participate, and the penalties for failing to deliver promised capacity, all of which directly influences the final cost passed on to your business.
Why it matters: What does this jargon actually mean for your P&L? The Capacity Market is a prime example of a 'non-commodity cost' – charges on your bill that have nothing to do with the wholesale price of the energy you use. For a business, this is a mandatory cost you can't avoid, but you can understand. It's a reminder that your final bill is a complex beast; focusing only on the unit rate (p/kWh) means you're missing a huge, and often rising, part of the picture. Understanding how these regulated charges work is the first step to building a more resilient and predictable energy budget.
What you can do:
Dig out your latest electricity bill and find the line item for 'Capacity Market' (or 'CM Levy') to see exactly what this grid insurance policy is costing your business each month.
When your next energy contract is up for renewal, ask your supplier or broker specifically how they treat Capacity Market costs – are they fixed for the contract term, or are they 'passed through' at cost, leaving you exposed to future price hikes?
If you have operational flexibility, ask your supplier about participating in Demand Side Response (DSR) schemes, which could allow your business to get paid for reducing electricity use during peak times.
Ofgem
Image source: Gemini / Meet George
The Spark: Regulator Ofgem is fast-tracking a new rule that will finally make it easier for your business to access its own detailed energy usage data.
The details:
Ofgem has approved an 'urgent' modification to the Balancing and Settlement Code (BSC), the rulebook for the wholesale electricity market.
The change, known as P498, will allow the market administrator (Elexon) to create a service providing businesses with direct access to their own half-hourly electricity consumption data.
This is designed to bypass the current system where businesses often face delays and difficulties getting this crucial data from their energy suppliers.
The new rule will also make it simpler for businesses to grant access to this data to authorised third parties, such as energy consultants or brokers.
Why it matters: This is more than just a technical tweak to market rules; it's about data ownership. Right now, getting your own half-hourly consumption data can be a slow, painful process entirely dependent on your supplier's cooperation. This data is the absolute foundation for managing your energy costs effectively – you can't control what you can't measure. By creating a direct access point, Ofgem is removing a major operational bottleneck for businesses. It means you and your advisors can analyse usage, spot waste, and get sharper quotes for new contracts much faster, shifting the balance of power from the supplier back to you, the customer.
What you can do:
Ask your broker or consultant: 'Are you aware of the P498 rule change, and how will you use it to give us better insights once it's live?'
Review your current process for getting energy data. If it's slow or manual, flag it as a problem to be solved when this new service launches.
Locate your Meter Point Administration Numbers (MPANs) from a recent bill. You will almost certainly need these to use the new data access service.
Department for Energy Security and Net Zero
Image source: Gemini / Meet George
The Spark: The UK government has approved a major new North Sea gas field, signalling a firm commitment to domestic fossil fuel production in the name of energy security.
The details:
The Secretary of State for Business, Energy and Industrial Strategy has granted consent to Shell for the development of the Jackdaw gas field in the central North Sea.
At its peak, the field is expected to produce enough gas to meet 6.5% of the UK's total demand, which will be processed and piped ashore in Scotland.
The project is a key part of the government's Energy Security Strategy, which aims to reduce reliance on volatile international markets and imported gas.
The approval was granted despite legal challenges from environmental groups, who argue it undermines the UK's climate commitments by locking in new fossil fuel infrastructure.
Why it matters: This decision highlights the government's core energy trade-off: balancing today's energy security against tomorrow's climate goals. By approving Jackdaw, they're betting that domestic gas production will better insulate the UK from volatile global markets. For your business, this is a clear signal that while the net-zero transition continues, natural gas will remain a critical, and government-backed, part of the UK's energy mix for the foreseeable future, underpinning the wholesale prices that drive your bills.
What you can do:
Stress-test your energy budget: This decision confirms the UK's medium-term reliance on gas. Model how a significant swing in wholesale gas prices would impact your P&L over the next 18-24 months.
Review your procurement horizon: Given the long-term focus on managing supply volatility, ask your energy consultant or supplier to model the cost-benefit of fixing your gas contract for a longer term (e.g., 24 or 36 months) versus a standard year.
Prioritise gas efficiency: The most direct way to de-risk your business from gas price exposure is to reduce your consumption. If you haven't had a recent gas efficiency audit, schedule one this quarter.
LATEST MARKET NUMBERS
📊 B2B Market Pulse
Wholesale Electricity Price (weekly avg.): 6.46 p/kWh (Down -7.5%) - Prices continued their downward trend, offering another week of relief and reinforcing the current window for favourable contract renewals.
Wholesale Gas Price: 2.67 p/kWh (Up +0.4%) - The gas market remained largely flat, providing stability but no significant downward pressure on electricity prices this week.
UK Carbon Price (UKA): £56.05 per tonne (Up +5.5%) - A sharp rise in carbon costs created a significant headwind, offsetting some of the price benefits delivered by high renewable output.
Wind + Solar Generation (Share of UK Mix): 49.3% (Up +16.3%) - Renewables once again dominated the grid, with wind and solar providing nearly half of the UK's power and continuing to be the main driver of lower wholesale costs.
The George Take: If last week was a demonstration, this week is the confirmation. The continued dominance of renewables, providing nearly half of all UK power, is the single biggest factor suppressing wholesale electricity prices. However, the story this week has a new layer of tension: a sharp 5.5% rise in the UK's carbon price. This created a significant headwind, preventing an even bigger drop in power prices. For businesses, this is the dynamic to watch. The era of simply tracking the gas price is over. The new battlefield for your energy bill is a constant tug-of-war between cheap, abundant renewables and the rising tide of non-commodity costs like carbon. Understanding this tension is now fundamental to any intelligent procurement strategy.
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📰/📊 News & numbers also worth reading
Smart Meter Rollout Stalls: Is Your Supplier on Ofgem's Watchlist?
Got a Combined Heat and Power (CHP) System? This Tax Break Could Save You Thousands
The New Red Flag for Vetting Financially Unstable Energy Suppliers
Great British Energy (GBE) Explained: What It Is (and Isn't) for Your Business
A PLUG FOR GEORGE 🔌
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