Summer 2024 outlook: business electricity

Article posted

2nd May 2024

Read time

3-6 min read


Mollie Pinnington

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The National Grid Electricity System Operator (ESO) has released its much-anticipated Summer Outlook report, outlining their expectations for the electricity network during the upcoming warmer months. This information is crucial for businesses of all sizes, as it can help with strategic planning and potentially impact operational costs.

Confidence in supply

The headline for businesses is positive. The ESO is confident in its ability to meet peak demand and maintain a secure electricity supply throughout the summer. This likely means minimal disruption for businesses reliant on a steady flow of power.


Staying alert

Whilst the ESO is confident in the supply of electricity, prices this summer are still going to be tied in and dependant on global gas market prices. Prices in the gas market are still extremely volatile due to conflict across Europe and the Midwest. Another factor that could shift electricity prices in the UK is the weather.


Conflict causing low gas production

Conflict in Europe, particularly the war in Ukraine, has significantly impacted gas prices. Russia was a major supplier of gas to Europe, and the disruption caused by the conflict has tightened supply. This scarcity has driven gas prices up dramatically. The UK, while not solely reliant on Russian gas, is still affected by the global market. As a result, the higher gas prices feed into the cost of electricity generation, pushing electricity prices up for British consumers.


Weather causing lack of generation

The UK's reliance on renewable energy sources like wind and solar power can be a double-edged sword. Periods with weak winds and low sunlight, like cloudy and still days, can significantly reduce electricity production from these sources. This dip in renewable energy generation can strain the national grid, potentially leading to shortfalls and the need for backup power plants to come online, which are often less environmentally friendly.


Lower Demand, Lower Costs?

However, the positive news is that whilst electricity production might dip this summer it is predicted that demand for electricity will be lower. The report predicts a continuation of the trend towards lower electricity demand compared to recent years. However, the ESO cautions that high global energy prices due to climate and geopolitical might still have an upward influence.


Shifting Export Landscape

The outlook anticipates lower electricity exports to continental Europe compared to the previous summer. However, compared to historical norms, export levels are still expected to be higher. This shift highlights the interconnectedness of the European energy market.


Planning for the Future

While the Summer Outlook provides valuable insights for the coming months, the ESO acknowledges the importance of looking ahead to winter. Businesses that rely heavily on energy during colder periods might want to consider additional planning based on future outlooks.


Using an energy consultant

. An energy consultant can be a lifesaver during this time. These experts can analyse your business's energy usage and identify areas for improvement. This could involve switching to a more cost-effective energy supplier, implementing energy-saving measures like upgrading equipment or adjusting lighting, or even exploring renewable energy options. By taking a proactive approach with an energy consultant, businesses can significantly reduce their electricity bills this summer and improve their overall energy efficiency.


Key Takeaways for Businesses

  • Disruptions due to electricity shortages are unlikely this summer.
  • Potential for lower wholesale electricity prices, but global factors might influence costs.
  • Businesses reliant on European energy markets should stay informed about export trends.
  • Consider using the Summer Outlook as a stepping stone for winter energy planning.


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