Business electricity price forecast in short: prices are more likely to rise than fall between now and spring 2027. Wholesale prices for this winter are at their highest level in almost four years, and network charges and the Climate Change Levy are due to go up again on 1 April 2027. Prices could ease later in 2027 if gas supply recovers, but no published forecast promises that.
This guide explains where prices are heading and why, using the latest published forecasts. For today’s prices per kWh by business size and supplier, go to our business electricity rates page.
Last updated: October 2026
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Key points
- New fixed contracts cost more than at the start of the year. Cornwall Insight put a typical 12-month electricity contract for a small industrial or commercial site 25% higher in August 2026 than in February.
- The cause is gas. Conflict in the Middle East has disrupted gas supply since late February 2026, and gas usually sets the wholesale price of electricity in Great Britain.
- Winter looks expensive. Forecasters expect the household price cap to rise by 16% in January 2027, which reflects the same wholesale market that businesses buy from.
- Non-energy charges rise again on 1 April 2027. Transmission charges go up by about 23% on the initial forecast, and the Climate Change Levy rises from 0.801p to 0.827p per kWh.
- A fall depends mainly on gas. If supply recovers and storage refills, wholesale prices can drop quickly, as they did in early summer 2026.
Where business electricity prices stand in October 2026
UK businesses paid about 24p per kWh on average for electricity between April and June 2026, before VAT and the Climate Change Levy, according to the latest government figures. That is 2% higher than a year earlier, 14% below the peak in late 2023 and 86% above the same period in 2021.
Those figures are an average across every contract, including deals fixed a year or two ago. They are slow to show what is happening to new quotes.
New quotes have moved faster. Cornwall Insight reported in August 2026 that a typical 12-month electricity contract for a small industrial or commercial site, using about 2,334 MWh a year, cost £638,500. That was 25% more than in February.
What you are quoted depends on your usage, location, meter and contract length. See current business electricity rates for typical prices by business size.
Why prices rose in 2026
Prices rose because gas became more expensive, and gas-fired power stations usually set the wholesale price of electricity in Great Britain.
Wholesale gas prices doubled in early March 2026 when the conflict in the Middle East began, according to the House of Commons Library. The conflict disrupted shipments of liquefied natural gas (LNG) through the Strait of Hormuz. Prices fell back in early summer, then climbed again. By late August, spot gas prices were at their highest level since January 2023.
Cornwall Insight named four other pressures in August: low European gas storage, a heatwave that raised demand for power, outages at Norwegian gas fields and strong demand for LNG from Asia.
The spike in early 2026 was much smaller than during the 2022 energy crisis. Even so, businesses have no price cap, so higher wholesale costs reach new contracts quickly. Our guide to why business electricity is so expensive explains the gas link in more detail.
Business electricity price forecast for winter 2026 to 2027
Forecasters expect prices to stay high through the winter. Cornwall Insight said in August that wholesale prices for the coming winter had reached their highest level in almost four years.
The clearest public signal is the household price cap. On 30 September 2026, Cornwall Insight forecast that the cap will rise by 16% in January 2027. Businesses are not covered by the cap, but it is built from the same wholesale prices that feed business quotes.
Gas storage is the main risk. European storage was 65% full in early September, the lowest for that time of year in 15 years. Cornwall Insight warned that if Europe ends the winter with storage run down, the effects could last well beyond it.
Forecasts like these change often. Cornwall Insight has said the next 12 months could stay volatile.
What changes on 1 April 2027
Three changes are already scheduled for 1 April 2027, and two of them push bills up.
| Charge | What is expected | How firm it is |
|---|---|---|
| Transmission charges (TNUoS) | The fixed charge for most business sites rises by about 23%, after a rise of roughly 60% in April 2026 | Initial forecast from NESO, published 11 May 2026 (analysis by Drax). Draft tariffs are due in November 2026 and final tariffs by 31 January 2027 |
| Climate Change Levy | The main rate on electricity rises from 0.801p to 0.827p per kWh | Confirmed by HMRC |
| British Industrial Competitiveness Scheme (BICS) | Eligible manufacturers get relief worth up to £40 per MWh | Relief is due to start in April 2027. See our BICS guide |
Transmission charges are mostly collected through the standing charge, so cutting your usage does not avoid them. Our guide to TNUoS charges in 2026 explains how they work.
Non-energy costs like these make up around 64% of a typical business electricity bill. That is why bills can rise even when wholesale prices fall.
What could bring prices down
A fall in business electricity prices depends mainly on gas.
- Gas supply recovers. Prices dropped back in early summer 2026 once the first shock passed. A lasting recovery in LNG supply would do the same again.
- Storage refills. A mild winter would leave more gas in European storage and take pressure off prices for 2027.
- Market reform. In April 2026 the government said it would offer older renewable generators fixed-price contracts, so that less of the market follows the gas price. A consultation is due later in 2026 and the first allocation round in 2027, so the effect on bills is some way off and its size is uncertain.
- BICS relief. From April 2027, eligible manufacturers pay less in policy costs.
None of these is guaranteed, and none removes the April 2027 increases in transmission charges and the Climate Change Levy.
Should you fix now or wait?
No business electricity price forecast can call the top or bottom of the market, and we will not pretend this one does. What you can control is how much risk you carry.
- A fixed contract locks your unit rate and standing charge for the term. You know your costs, but you do not benefit if the market falls.
- A shorter fix, such as 12 months, lets you come back to the market sooner. A longer fix gives more certainty against further rises.
- Waiting can pay off if prices fall. It can also leave you on out-of-contract rates, which are usually far higher than a fixed deal.
Suppliers will usually agree a new contract up to 12 months before it starts. That means you can watch the market and fix when a price suits you, instead of taking whatever is on offer in the final weeks.
For more help, read about business energy contract types and the 4 questions to ask before your business energy contract renewal.
To see what suppliers would quote you today, compare business electricity prices with GLCG. It is free and there is no obligation.
How to protect your business from price rises
You cannot control the market, but you can limit what it costs you.
- Know your contract end date and start comparing early.
- Never roll onto out-of-contract rates by default.
- Compare the whole quote, including the standing charge, not only the unit rate.
- Check your bills against your contract, so you only pay what you agreed.
- Cut waste. Our guide on how to cut business electricity costs has practical steps.
Business electricity price forecast FAQs
Are business energy prices going up?
Yes. As of October 2026, prices for new business energy contracts are higher than at the start of the year. Cornwall Insight reported that typical 12-month electricity and gas contracts for a small industrial or commercial site were both 25% more expensive in August 2026 than in February. Further increases in transmission charges and the Climate Change Levy are due on 1 April 2027.
Will business electricity prices go down in 2027?
They could, but no published forecast promises it. A fall depends mainly on gas supply recovering and European storage refilling after the winter. Even if wholesale prices drop, transmission charges and the Climate Change Levy are due to rise on 1 April 2027, which limits how far bills can fall.
Why are business electricity prices rising?
Business electricity prices are rising because wholesale gas has become more expensive, and gas usually sets the wholesale price of electricity in Great Britain. Gas prices doubled in early March 2026 after conflict in the Middle East disrupted LNG supply. Rising network charges add to the total.
Does the energy price cap forecast affect businesses?
Not directly. The energy price cap only applies to households, and there is no cap on business electricity. The forecasts are still a useful guide, because the cap is built from the same wholesale prices that suppliers use for business quotes.
When is the best time to fix a business electricity contract?
The best time is before your current contract ends, while you still have a choice. Suppliers will usually agree a new contract up to 12 months before it starts, so you can compare early and fix when a price suits you. Leaving it late risks out-of-contract rates.
Get a quote before your renewal
GLCG compares business electricity prices from our panel of 22 suppliers and explains each quote in plain English. If your contract ends in the next 12 months, get a free business electricity quote and see where you stand.
We update this business electricity price forecast when new figures are published. The next updates are NESO’s draft network tariffs in November 2026, the government’s business price figures on 17 December 2026 and NESO’s final tariffs in January 2027.
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