Winter Energy Outlook 2026 – Switch Smarter This Winter

For most businesses, winter energy costs feel like a mystery. One month, everything seems stable, and the next, prices are climbing faster than expected.

But winter price surges aren’t random, they follow predictable patterns driven by supply, demand and market behaviour. Once you understand those forces, it becomes easier to prepare and even use them to your advantage.

In this blog, we’ll explain what’s driving this year’s price pressures, how winter 2025/2026 differs from previous years, and what businesses can do to stay ahead of any spikes.

Why Energy Prices Rise in Winter

Each year as temperatures drop, gas and electricity demand rises and it’s not just households turning up the heating. Offices, warehouses, retailers and restaurants all work through their busiest season means longer hours, brighter lights and increased production as businesses push to meet demand during the colder months.

All that extra activity puts pressure on the grid. When demand peaks in the early mornings and evenings, the system works harder to keep up and wholesale market prices tend to climb.

UK gas production also continues to decline, at the same time, meaning more energy now comes from imports through pipelines or liquefied natural gas (LNG) deliveries. In theory gas is gas but those routes have limits. When global demand rises, the price of every shipment follows and supply often goes to whoever is willing to pay the most.

Earlier this year, UK gas storage levels were around 26% lower than at the same point in 2024. That doesn’t mean shortages are expected, but it does mean there’s less of a safety net if cold weather or supply issues hit. With a smaller buffer, the market becomes more sensitive, and even small disruptions can trigger sharp price swings.

Traders also tend to build what’s known as a risk premium into winter pricing. If forecasts suggest colder weather or geopolitical tensions start to build, prices are pushed up in anticipation often weeks before the temperature drops.

Combined these pressures, make winter one of the most volatile periods in the energy calendar.

What’s Different This Winter

Winter 2025/26 is shaping up to be tighter than last year. While energy prices always rise during the colder months, the fundamentals haven’t changed, but the margins have.

UK gas production continues to fall and wind generation in recent months, has also been weaker, means the system will rely more heavily on gas-fired power to meet demand. As a result, gas prices are once again the main driver of overall costs.

Ofgem and National Grid have both suggested that supply should remain secure, but tighter capacity means there will still be “tight days” when demand edges close to available limits. Those are the moments when wholesale prices can spike with little warning.

Across Europe, gas storage levels are healthier thanks to mandated refills, but the UK’s smaller reserves leave the market more exposed to short-term swings. A cold spell, a supply issue at an import terminal or a shift in global LNG flows could all be enough to move prices sharply in a matter of days.

Even if the winter turns out to be mild, volatility is still likely. The question isn’t whether prices will move, but how quickly they’ll react when they do.

Why Waiting Rarely Works

It’s tempting to wait and hope prices fall before signing your next energy contract, but wholesale markets often rise long before those increases appear in retail rates. By the time businesses see the headlines, the window for better deals has usually closed.

Wholesale prices are also highly reactive. A week of cold weather, a supply disruption overseas or a dip in wind generation can push costs up overnight. Those movements are outside anyone’s control, but the timing of your contract isn’t.

That’s why planning ahead matters. Following the market and acting on insight rather than instinct can make a real difference to long-term costs. For larger energy users, getting the timing right can reduce energy spend by up to 10 to 20% , proving that strategy has a big impact.

What Businesses Can Do Now

The best approach is proactive, not reactive. Start by reviewing your current contract and knowing when your renewal window opens. Take time to understand your energy use like when you consume the most and where there may be opportunities to cut demand. This gives you the breathing room to explore options while rates are steady, rather than being forced to decide when the market is already moving.

Keeping an eye on wholesale trends also helps. You don’t need to track the market every day, but having a general sense of where prices are heading makes a big difference when it’s time to act. Look at how your business uses energy throughout the day too, as peak hours, overnight processes and seasonal shifts all affect what you pay.

Most importantly, don’t wait until renewal day. Businesses that review contracts three to four months in advance tend to secure better rates and more flexible terms. Energy planning isn’t about predicting the future, it’s about being ready for it.

Turning the Spike into a Strategy

Rising winter prices are a challenge, but they don’t have to catch your business off guard. It’s about understanding what drives the market, acting early and making informed choices before external pressures start to build.

That’s where Switch365 can help. Our Free Triage Review gives you a clear picture of where you stand, identifies hidden costs and helps you plan renewals before the market moves. You’ll also receive proactive renewal notifications, so you’re reminded well before your window opens, not after.

Book your free Triage Review today
and see exactly where your business stands before prices begin to shift.

You’ll also benefit from a full contract check, accurate bill validation and live market comparisons to ensure your rates still match current conditions. We’ll give you a clear, straightforward summary with key recommendations to build a strategy around your business.

With Switch365 as your partner, you’ll have the insight, support and confidence to put that plan into action.