Energy prices in the UK have been highly volatile in recent years, and most credible forecasts indicate that this uncertainty will continue — and potentially intensify — heading into 2026. Rising non-commodity charges, increased network investment, global LNG dependency, and new Ofgem regulations are all shaping a more complex pricing environment for businesses.
For SMEs, industrial sites and multi-location organisations, preparing early is essential. In this guide, we explain why business energy prices in the UK are expected to become more volatile in 2026, which costs are rising, and the most effective strategies to protect your organisation.
Why energy prices are expected to become more volatile in 2026
Even as the UK accelerates renewable generation, gas remains a core component of grid stability. Ongoing geopolitical tensions and LNG shipping constraints will continue to influence wholesale electricity and gas prices in 2026, meaning businesses remain exposed to global fuel markets and shipping routes, not just domestic demand.
Major network and infrastructure investments planned from 2025–2026 are also pushing up costs. These include grid reinforcement, integration of distributed and renewable generation, and higher system balancing requirements — all of which typically show up on invoices as network charges rather than as clearly labelled project costs.
Non-commodity costs — network, policy, balancing and delivery charges — already represent well over 60% of a typical business electricity bill. These are expected to increase again in 2026 due to higher transmission (TNUoS), distribution (DUoS) and balancing (BSUoS) charges, alongside Capacity Market contributions and policy costs linked to decarbonisation and security of supply.
Ofgem’s ongoing reforms, including the Targeted Charging Review and new network pricing frameworks, are reshaping how these costs are recovered from end users. Many of the resulting charges are flat, fixed or banded, placing higher baseline costs on businesses with predictable or relatively stable demand patterns.
For many organisations, the biggest price shock in 2026 will not come from wholesale energy itself — it will come from the steady rise of non-commodity charges. Even companies with stable or modest consumption will see increases because so many of these elements are no longer purely usage-based.
How businesses can prepare for 2026 energy volatility
The first step is to review your contract renewal timeline early. Waiting until your renewal month can expose you to last-minute pricing spikes and fewer supplier options. Businesses with a business energy contract renewal in late 2025 or early 2026 should start comparing rates now and build a clear timeline for tenders, supplier responses and internal approvals.
Procurement options: fixed, flexible and hybrid
Choosing the right energy procurement strategy is equally important. Fixed contracts can be attractive for budgeting stability and cash flow planning, protecting you from sharp wholesale movements, but may lock in higher prices if the market subsequently falls.
Flexible contracts are more suitable for larger consumers or portfolios that can actively manage risk. They allow you to buy blocks of energy at different times, taking advantage of market dips, but they require clear risk limits, governance and a robust trading strategy.
Hybrid procurement is becoming more common in periods of high volatility. In this model, part of your consumption is fixed, while another portion is bought flexibly. This can balance protection and opportunity, particularly when UK energy price forecasts are uncertain but non-commodity costs are clearly rising.
Using data and audits to reduce costs
Beyond contract structures, it is vital to understand your actual usage. A consumption audit based on MPAN and MPRN data can reveal profile class, load factor and time-of-use patterns. This type of analysis highlights excessive evening or peak-time use, opportunities to shift load into lower-cost periods, and inefficiencies that drive avoidable network charges.
An audit can also show whether you are on the wrong meter type or tariff structure for your demand profile. These insights are particularly valuable for SMEs who may never have reviewed their half-hourly data or DUoS banding, yet face rising SME electricity costs linked to network charges.
Long-term tools: PPAs and efficiency
As renewable capacity grows, long-term green energy contracts and renewable Power Purchase Agreements (PPAs) are becoming increasingly attractive. For larger consumers, a well-designed PPA can provide price stability, long-term budget certainty and clear sustainability benefits, while partially insulating you from short-term wholesale volatility.
Targeted energy efficiency and load-shifting measures can further reduce your exposure. Reducing consumption during peak network times has a direct impact on DUoS, TNUoS, BSUoS and overall non-commodity costs. Simple actions such as LED retrofits, smarter HVAC scheduling, shifting high-demand processes to off-peak periods, and deploying automated monitoring systems can deliver meaningful savings.
Future-proofing your 2026 energy strategy with Voltbridge
Navigating the UK energy market in 2026 will be increasingly complex, particularly as non-commodity and network elements grow as a share of total costs. Working with a specialist broker such as Voltbridge can help you compare offers from multiple suppliers, monitor live market movements and select between fixed, flexible or hybrid procurement options.
A broker can also help you identify the most cost-effective window for business energy contract renewal in 2026, explain all non-commodity charges transparently line by line, and significantly reduce the internal time your team spends negotiating with suppliers and managing tenders.
With a clear energy procurement strategy and expert guidance, businesses can turn volatility into an opportunity to stabilise — and, in some cases, reduce — long-term energy costs.
Conclusion
Energy price volatility is not going away, and projections for 2026 indicate significant changes in the structure of business energy prices in the UK. Companies that prepare early, understand the drivers behind these increases, and adopt strategic procurement practices will be better placed to protect their budgets and plan with confidence.
Voltbridge is ready to support businesses across the UK with transparent guidance and tailored energy strategies. Start your free business energy assessment today.
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