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:
How Your SME Can Get a £7,500 Grant to Upgrade Your Heating
Why Your Business's Standing Charge Could Be About to Change
This Week's B2B Market Pulse: Gas Up, Electricity Down
Five More "Hidden Gem" Stories You Might Have Missed
LATEST DEVELOPMENTS
Ofgem
Image source: Ideogram / Meet George
The Spark: The UK's Boiler Upgrade Scheme (BUS) is successfully providing £7,500 grants to small businesses to replace fossil fuel heating with modern heat pumps, and with a budget nearly doubling for 2025-26, now is the time to act.
The details:
The grant provides a flat £7,500 towards the cost of an Air Source or Ground Source Heat Pump for eligible properties in England and Wales.
The scheme is open to homes and small non-domestic buildings, but so far only 0.5% of grants have gone to businesses, representing a major untapped opportunity for SMEs.
Demand is surging; the government increased the 2024-25 budget from £150M to £205M and has announced a further increase to £295M for 2025-26.
The most common systems being replaced are gas (52.6%) and oil (18.1%) boilers, with the average total quoted cost for an air source heat pump installation being £13,433 before the grant.
Why it matters: This report isn't just a government update; it's a strategic roadmap for savvy SMEs. The real story is about future-proofing your business against rising energy costs and carbon taxes. While the £7,500 grant is a powerful incentive that cuts your immediate capital expenditure, the bigger win is the long-term operational shift away from volatile fossil fuel markets. For a business, this isn't just an equipment upgrade; it's a government-subsidised investment in resilience. By transitioning to a more efficient electric heating system, you gain more predictable operational costs, a tangible ESG win for your brand, and a head start on regulations that will inevitably make carbon-intensive heating more expensive.
What you can do:
Check Your Eligibility Now: If your business owns its premises and uses a heating system under 45 kWth capacity (which covers most small commercial spaces), you are the target audience for this grant.
Demand a 'Total Cost' Analysis: When getting quotes from MCS-certified installers, insist on a projection of annual running costs compared to your current system. With the £7,500 grant, the payback period on the remaining investment could be shorter than you think.
Future-Proof Your Budget: Use this opportunity to start forecasting your energy costs based on a more efficient, electric-led system. This is a crucial step in de-risking your business from future fossil fuel price shocks.
Ofgem
Image source: Ideogram / Meet George
The Spark: Ofgem has launched a major review that could fundamentally change how the fixed costs of running Britain's energy grid are split across consumer bills.
The details:
The energy regulator, Ofgem, has started a 'call for input' to review how the costs of operating the national energy system are allocated and recovered.
The current system was designed for a fossil-fuel-based grid and may create unfair outcomes as we switch to a decentralised, net-zero system with more renewables, electric vehicles, and heat pumps.
At the heart of the review are 'residual' network and policy costs – the charges added to bills to pay for grid maintenance and government schemes – and whether they unfairly penalise users of green technology.
The goal is to design a fairer, more efficient system that supports decarbonisation without placing an undue burden on specific groups of consumers or discouraging investment.
Why it matters: What does 'cost allocation and recovery' actually mean for your bill? Think of it like this: beyond the cost of the energy you use, your bill also includes a share of the cost of the national grid itself – the poles, wires, and the people who keep the lights on. Currently, this is often charged based on how much electricity you consume. This review tackles the core problem that this old model can punish people for doing the right thing. For example, it can make it more expensive to run an electric vehicle or a heat pump, even if you use them at off-peak times when green energy is abundant. The fundamental tension Ofgem must resolve is how to fairly share these fixed national costs in a world of smart, flexible technology. Getting this right is crucial to ensuring the path to net zero is affordable and doesn't leave people behind.
What you can do:
Audit Your Standing Charges: Pull out your last few bills and scrutinise the 'standing charge' and other non-commodity costs. Understanding your baseline now is the first step to identifying how these changes might affect you.
Model Different Scenarios: If your standing charge increased by 20% but your unit rate dropped, what would that do to your annual cost? A quick spreadsheet model can prepare you for potential future billing structures.
Engage with policymakers here by the 24th September 2025 to advocate for fairer energy cost distribution.
LATEST MARKET NUMBERS
📊 B2B Market Pulse
Wholesale Electricity Price (weekly average):
7.68 p/kWh(Down 5.3%) - A significant drop in the weekly average price creates a favourable window for businesses with upcoming contract renewals.Wholesale Gas Price:
2.85 p/kWh(Up 5.5%) - The rising price of gas, the UK's primary power source, signals underlying bullish sentiment in the market that could lead to future price rises.UK Carbon Price (UKA):
£50.10 per tonne(Stable) - The cost of carbon, a key non-commodity charge, remained steady this week, providing some stability to the non-wholesale portion of business bills.Wind + Solar Generation (Share of UK Mix):
31.1%- A strong week for renewable generation played the dominant role in the market.
The George Take: This week's data tells a clear story: renewables are king. Despite a notable rise in the price of wholesale gas, a high contribution from wind and solar (accounting for nearly a third of the UK's entire electricity mix) flooded the grid with cheaper power. This suppressed the average electricity price, overriding the bullish signal from the gas market. For businesses, this highlights the increasing importance of market timing; a windy week can create significant short-term savings opportunities, even when other market indicators are pointing up.
ALSO ON OUR RADAR
📰/📊 News & numbers also worth reading
Decoding RIIO-3: The Multi-Billion Pound Rulebook That Will Define Your Future Energy Bill
After Decades in the Dark, UK Heat Networks Finally Get a Rulebook
£500m 'Warm Homes' Grant: A Lifeline for Low-Income Households, A Test for Local Councils
Beyond the Jargon: New Data Reveals the Slow Death of Britain's Dirtiest Industrial Fuels
Green Light for NeuConnect: Why the UK's First Power Link to Germany is a Game-Changer
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