29/10/2026
⚡🔥 Budget 2026 and the energy market: what it means for your business
Yesterday’s Budget had a lot to say about energy bills. Most of it won’t help a business renewing a contract this winter. Here’s the whole picture.
The market this week
🔸 Gas is around 250p/therm, up 136% since late June and near a four-year high
🔸 Power for Jan-Mar 2027 is around £188/MWh, with Summer 2027 priced at about £131
🔸 Brent crude is around $113 a barrel
🔸 European gas storage is only about 75% full, the lowest for the time of year in records going back to 2009
🔸 Qatar has extended force majeure on one supply contract to 30 December, and Norwegian outages and very low wind this week pushed prices higher
What the Budget did
Most of the headline measures are for households:
🔸 A £100 payment for homes in council tax bands A-D in England
🔸 The VAT cut on home electricity extended to July 2027
🔸 Plans to remove the gas standing charge
None of these apply to business energy contracts. Business electricity still carries VAT, and business customers have no price cap.
What it means for business
🔸 BICS confirmed: Eligible manufacturers can get a 20-25% electricity discount from April 2027, with back-payments for 2026-27. Applications close 30 November.
🔸 Climate Change Levy: The main electricity rate is frozen from April 2028.
🔸 No new policy costs: The Government says no new policy costs will be added to bills until a cost-control framework is in place, due in 2027.
🔸 Longer-term: A consultation on fixed-price contracts for renewable generators aims to loosen gas’s grip on prices.
What it didn’t do
The Budget doesn’t change wholesale gas or power prices, and it doesn’t address rising network charges, which are forecast to go up around 23% from April 2027.
Next 12 months vs what lies ahead
The Budget’s business measures mostly help from 2027 onwards, not this winter. This winter is still driven by the Strait of Hormuz, thin storage and the weather. Even the household cap forecasts for January have risen to around £2,160-£2,185 from the earlier £1,999.
Further out, new LNG supply and more UK wind and solar should help, but the IEA expects the LNG wave to arrive at least two years later than planned, so think 2028-29 at the earliest.
What does that mean in practice?
✅ Cover the energy you can’t afford to leave exposed over the next 12-24 months
✅ Think carefully before locking in today’s prices for years ahead
âś… Check whether your contract fixes network charges or passes them through
âś… Manufacturers: check your BICS eligibility before 30 November
At Business Utility Services Ltd, we keep an eye on these markets every day so you don’t have to. We’ll talk you through your options with one point of contact from quote to contract.
đź“© Renewal coming up? Give us a call on 01772 367717 or visit www.businessutilityservices.co.uk.
