Making sense of energy market volatility

Energy markets can change quickly. Global events, supply concerns, weather patterns and shifts in demand can all influence wholesale energy prices, creating periods of uncertainty for businesses. 

In the latest edition of our Smartest Insights series, Nicholas Boswell, SME Channel Sales Team Manager at SmartestEnergy Business, shares his perspective on the recent volatility affecting energy markets and what it means for brokers, TPIs and business customers. 

As Nicholas explains: 

Recent geopolitical tensions have introduced uncertainty into international energy markets, creating potential implications for wholesale gas and electricity prices across the UK. 

For businesses reviewing contracts or approaching renewal, understanding these market movements can help support better decision-making and reduce exposure to unexpected costs. 

Why energy market volatility matters 

Although businesses consume energy locally, the UK remains connected to global energy markets, particularly when it comes to gas supply. 

As Nicholas notes: 

Because gas continues to play an important role in electricity generation, movements in gas markets often influence electricity prices as well. This means events taking place thousands of miles away can ultimately affect business energy costs here in the UK. 

The result is greater uncertainty for businesses trying to plan budgets and forecast future expenditure. 

The impact on businesses with variable contracts 

Periods of market volatility can create challenges for organisations operating on variable or market-linked contracts. 

During times of uncertainty, businesses may experience: 

• Rapid increases in wholesale energy prices 
• Greater difficulty forecasting future costs 
• Increased exposure to short-term market fluctuations 
• Additional budgetary pressure and uncertainty 

While variable contracts can deliver benefits when markets are stable or falling, they also expose businesses to sudden market movements. 

As a result, periods of heightened volatility often prompt organisations to review whether their current energy strategy still aligns with their business objectives. 

The role of fixed energy contracts 

For many businesses, fixed contracts can provide additional certainty during uncertain market conditions. 

According to Nicholas: 

Fixed contracts can offer: 

Protection against short-term price spikes 

Locking in energy rates can help shield businesses from sudden wholesale market increases. 

Greater budget certainty 

Known energy costs can support financial planning and improve forecasting accuracy. 

Reduced exposure to global events 

While businesses cannot control geopolitical developments, fixed contracts can help reduce the immediate impact of market volatility. 

Every business has different priorities and risk appetites, which is why contract decisions should always be assessed against individual business requirements. 

Supporting brokers and TPIs in a changing market 

Energy brokers and TPIs play a critical role in helping businesses understand their options and make informed contract decisions. 

As market conditions evolve, customers increasingly look to trusted advisers for guidance on contract structures, market timing and risk management strategies. 

Nicholas highlights the importance of providing partners with accurate and timely information:

Providing up-to-date pricing, market insight and expert support enables brokers and TPIs to have more informed conversations with customers and helps businesses make decisions with greater confidence. 

Managing risk during periods of market uncertainty 

With so many factors influencing wholesale energy prices, from geopolitics and weather patterns to supply and demand dynamics, market conditions can change rapidly. 

For businesses approaching contract renewal or currently operating on variable pricing arrangements, now may be an appropriate time to assess current exposure to market risk. 

As Nicholas explains: 

The right approach will vary between organisations, but reviewing options regularly can help ensure energy procurement strategies remain aligned with business goals. 

Planning ahead in volatile energy markets 

Energy market volatility is likely to remain a feature of the UK energy landscape as global events continue to influence wholesale pricing. 

While businesses cannot control market movements, they can take steps to better understand their exposure, review contract options and make informed decisions based on their operational needs and appetite for risk. 

At SmartestEnergy Business, we believe transparency and proactive communication are essential during periods of uncertainty. By providing timely market insight, practical guidance and expert support, we help businesses, brokers and TPIs navigate changing market conditions with greater confidence and clarity. 

About the author 

Nicholas Boswell is SME Channel Sales Team Manager at SmartestEnergy Business and has more than a decade of experience helping UK businesses navigate energy procurement, market uncertainty and sustainability challenges. 

Working closely with energy brokers, Third Party Intermediaries (TPIs) and SME customers, Nicholas specialises in developing tailored energy solutions that help businesses manage costs, reduce risk and support their long-term sustainability goals. His expertise spans business energy contracts, channel strategy, energy market dynamics and customer engagement. 

At SmartestEnergy Business, Nicholas leads the SME channel strategy, working alongside partners across the UK to help businesses make informed energy decisions in an increasingly complex market environment.