Energy market update
ESPO flexibly-priced gas customers have received updated prices for the April 2025 to March 2026 period, which due to the falling wholesale energy prices over the last 18 months has resulted in lower rates.
In contrast to the energy crisis of 2022/23, markets are now more confident that Europe can source enough gas to meet demand without relying on supplies from Russia - however, the market remains tight and exposed to global events. Therefore, while energy prices have reduced, they are still higher than they were before the war in Ukraine and they are likely to remain volatile. This means we could see prices move up and down quickly over the near-to-medium term.
A significant part of this volatility is driven by largely unpredictable events. This year has seen the threat of increasing global tariffs hit forecasts for economic output and therefore reduce the value of many energy commodities. The outcomes of conflicts in the Middle East and Ukraine will directly impact energy prices and remain uncertain. We have also already seen periods of cold weather with minimal wind generation, resulting in spikes of gas demand for power generation.
The ESPO Energy team is constantly tracking the movements in the market on our customers' behalf and securing energy when conducive to do so, whether that is to manage the risk of increases in prices or take advantage of any dips in value. This enables us to deliver a risk-managed annual rate to our customers that avoids the threat of fixing all energy costs at a high point in the market.
Gas (192) framework renewal
The Energy team has been evaluating the bids for the next gas framework. We are now in the final stages and hope to be making an award to the successful supplier by late June.
The details of the outcome of the tender will be communicated to corporate customers in July to allow them to begin the due diligence required to make a decision about their renewal, and for our independent customers in September when the schools return from their summer break.
This framework will run from 1 April 2027 to 31 March 2031; customers will be asked to renew their contracts by 31 December 2025 to allow the Energy Trading team to achieve the best rates from the wholesale markets.
We are currently in the process of tendering two of our other energy frameworks. The Utility Metering and Data Services framework (512) expires in August and a new framework will incorporate the changes required for the introduction of Market Wide Half Hourly Settlement which commences in October 2026. Award of this framework is anticipated in early August.
Electricity (191) framework renewal
Pre-procurement activity on the new framework will commence in Autumn 2025 as we look to attract a wide range of bidders to the tender. We expect a tender to go out in March/April 2026.