Volatile energy prices set to continue into 2030

It found that the conditions could be in place for volatile wholesale energy prices to continue into 2030 and beyond, unless the UK develops a long-term strategy to cope with changes in energy production. 

Cornwall Insight forecasts that from 2026 prices could become increasingly volatile, jumping by £95 per megawatt hour between the summer and winter. And these seasonal differentials are predicted to increase to nearly £120 per megawatt hour by 2030. 

This will be driven by a combination of just in time energy procurement, an overreliance on insecure energy imports, increased weather risks and a reduction in nuclear and coal power stations. 

Commenting on the research, Tom Edwards, a senior modelling consultant at Cornwall Insight, said: “Our overreliance on imported energy will also leave us vulnerable to variable pricing, with supply chain disruptions, geopolitical tensions and economics shifts, all having the potential to spill over into our market.

“Increasing the UK’s longer-term energy storage facilities could go a long way to reducing seasonal variations, helping to harness the locally generated energy from high renewable output periods for use when it’s still cold and dark.

“It will also be important to deliver change on the demand side, with investment in energy efficient housing and electric vehicles having the potential to considerably reduce the level of power plant capacity needed.

“Looking further ahead, policy makers must understand that the market designs of the next 20-30 years cannot rely on stable economic, geopolitical, or ecological systems. A greater focus on resilience and risk above efficiency and low costs across our economy is needed. 

“This will include a significant role for the state, especially if they are to guide us through the enormous technical and sociological changes required to deliver the net zero ambitions industry and government have promised to the electorate.”