In this article, we take a retrospective look at the last quarter, focusing on the data behind recent energy market trends and exploring practical steps that can be taken to help mitigate costs.
For regular updates on the direction of the energy market and the key drivers behind these trends, our monthly market blogs are now available on the NFU Energy website. You can read the June update here: June energy market update – Heatwaves and geopolitics dominate | NFU Energy.
Energy supply
To understand why the UK energy market is so volatile, it’s helpful to look at our energy supply. An overview of the electricity mix is shown below:
The largest change between Quarter 1 (Q1) and Quarter 2 (Q2) was fossil fuel electricity, which dropped by 6%, made up by a 4% increase in electricity import, 2% increase in nuclear, and 1% increase in renewables. Since imported power is one of the more expensive sources, and gas prices averaged around 10% higher than Q1, average electricity prices also spiked.
Gas supply dropped due to Norwegian pipeline maintenance, whereas much of the renewable power increase came from solar PV, which benefitted from the multiple heat waves and very clear sunny weather in June. Several periods of negative import prices, meaning sites will get paid to import power, were present during the middle of the day.
Pricing
As outlined in NFU Energy’s blog, the events in the middle east will likely continue to be the largest factor affecting markets both through speculation and physical means of disrupted gas shipping routes.
Below is a frequency distribution of the intraday electricity price in Q2 2026:
May and June intraday trended upwards, with peaks as high as £800/MWh in June, and 11 instances where prices exceeded £300/MWh. Whilst May prices had a smaller spread, June again widened on both the low and high end. The most common price banding across the quarter was between £80-140/MWh.
More detailed electricity and gas price tracking is shown below:
The most notable trend in Q2 has been the frequency of negative pricing in April and June, with high price spikes in late June. Average electricity prices remained around £100/MWh. Gas prices began to drop towards the end of June, by around 10p/th, averaging at 113p/th.
What does this mean?
With more extreme electricity peaks combined with dropping gas price, growers who operate CHP have a good opportunity to capitalise. However, the frequent negative pricing means that CHP operation must be carefully managed to maintain profitability. Whilst gas price takes a slight downward turn, it may be worthwhile locking in some long-term gas import trades alongside electricity export trades, to guarantees a level of profit for later seasons.
For those without self-generation, negative prices passively reduce costs, but there is an opportunity to optimise savings through load shifting. Particularly those who have LED lighting, advancements have been made to dynamic lighting programs, which deliver lighting around a strategy to minimise electricity cost without significantly impacting crop performance.
Finally, reducing reliance on grid power is the best way to mitigate a volatile market. Energy efficiency, self-generation, and alternative heat sources are all opportunities to consider.
If you want some advice on your contract, trading, or further consultancy on how to reduce your costs, contact us at growsave@nfuenergy.co.uk.
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