What do the latest business energy costs figures say?
Business energy costs have risen around 25% since February, according to Cornwall Insight’s Business Energy Cost Forecast, published in August. The example it uses is a small industrial or commercial site, such as a larger retail and leisure site or a small manufacturer. A 12 month electricity contract for that site would now cost an average of £638,500, and gas around £1.15 million.
Those figures are for a big site. Cornwall Insight’s example uses 2,334 MWh of electricity and 15,275 MWh of gas a year, which is far more than a typical small office, shop or workshop. So treat the 25% as the direction of travel, not a prediction of your own bill.
The direction matters, though. Cornwall Insight says many businesses have contracts renewing in October, and that its forecasts suggest they’ll be locking in at a worse rate than they’d hoped. If that’s you, your business energy costs are worth a look before the end date, not after it.
Why are business energy costs going up?
Wholesale prices are the main driver. Cornwall Insight says the conflict in the Middle East has pushed wholesale prices to their highest level in almost four years, and that a lasting ceasefire isn’t in sight. It has also made it harder for European gas storage operators to refill stocks ahead of winter.
The consultancy also points to heatwaves in Europe, which raised demand for cooling over the summer, extended Norwegian offshore production outages, and strong demand for liquefied natural gas from Asia.
On top of wholesale prices, businesses face increases in other parts of the bill, including the cost of balancing the electricity system and network costs. Our guide to hidden business energy charges explains what those lines mean on an invoice.
Is there support to bring business energy costs down?
Not for most firms. Cornwall Insight says government support is highly targeted at the moment, and that nearly 90% of business energy consumption comes from businesses that have had no support at all on their policy costs.
Two schemes sit behind that. The British Industry Supercharger already covers around 500 energy intensive businesses. The British Industrial Competitiveness Scheme is the bigger one, covering around 10,000 eligible businesses with an exemption from some policy costs, and Cornwall Insight says it takes effect from April 2027, including backdated support for the current year. Businesses in the Industrial Strategy’s eight growth sectors fall under that April 2027 date too.
Note the gap between the announcement and the money. Even a qualifying business is looking at April 2027, not this winter, so support should not be part of how you price a contract you are signing now. If you think your business might qualify, check the scheme details directly rather than assuming. Our guide to UK business energy grants is a good place to start.
How can a small business reduce its exposure to rising energy costs?
How exposed you are depends on how you buy your energy. Cornwall Insight says many larger companies lock in prices months or even years ahead through hedging, so a short term spike doesn’t hit their bill straight away. The longer prices stay high, the wider the effect becomes.
There’s no silver bullet here, according to Cornwall Insight. It lists hedging, fixing prices in advance, and investing in on site generation and flexibility to rely less on the grid. For most small firms, the practical version is knowing exactly when your contract ends and what happens if you do nothing.
Start with what you actually use. Your business energy costs are the unit rate, the standing charge and the extra charges on top, multiplied by your usage, so a rise of a quarter on the rate doesn’t always mean a quarter on the bill. Pull out your last 12 months of bills before you compare anything.
The Do-Nothing Default bites hardest at the end of a contract. If a fixed contract ends and you haven’t agreed a new one, you can be moved onto a default rate, which can be higher than a fresh deal. We cover that in our guide to business energy deemed rates.
What should you check before you renew your business energy?
Start with the date. Find your contract end date and any notice period, because renewing late can cost you more than renewing at a slightly worse moment. Then look at your usage and decide whether a fixed or flexible contract suits how predictable your business is.
Key takeaways
- Find your contract end date and notice period now, not the week it ends.
- Compare fixed and flexible options against your own usage, not a headline percentage.
- If you use a broker, ask how they’re paid and what commission is built into your rates.
Our guides on fixed price business energy and business energy brokers cover those two choices. Roo can do the comparing, but you still need to know your end date.
Frequently asked questions about business energy costs
- Have business energy costs really gone up 25%?
- Cornwall Insight says a typical 12 month contract for a small industrial and commercial site has risen around 25% since February. That example is a large site, using 2,334 MWh of electricity and 15,275 MWh of gas a year, so your own change could be different.
- Will my business energy costs go up if I renew now?
- It depends on your usage and the rates on offer when you renew. Cornwall Insight’s view is that businesses renewing this autumn face a tougher market than they might have hoped for.
- Is there government help with business energy costs?
- Cornwall Insight says support is highly targeted. The British Industry Supercharger covers around 500 energy intensive firms now. The British Industrial Competitiveness Scheme covers around 10,000 businesses, including those in the Industrial Strategy’s eight growth sectors, and takes effect from April 2027 with backdated support for the current year.
- What happens if my business energy contract ends and I do nothing?
- You can be moved onto a default rate that can be higher than a fresh contract. Check your contract terms for what applies to you.
Sources
- Cornwall Insight, Business energy bills climb 25% since February, published 20 August 2026. The 25% rise, the £638,500 electricity and £1.15 million gas contract figures, the 2,334 MWh and 15,275 MWh consumption basis, the wholesale and storage causes, the two support schemes and their April 2027 date, and the nearly 90% figure.
Checked 12 October 2026.
