Winter 2026: higher prices, a record El Niño and the ESOS deadline

Three things are converging as we head into winter: rising wholesale energy prices, one of the strongest El Niño events on record, and a busy few months for energy compliance. None of them is in a business’s control. How much energy you use, and how well you understand it, is.

Prices are heading up again

Wholesale markets rose through September. By the end of the month, day-ahead power was around £160/MWh (up from about £130 at the end of August) and day-ahead gas around 178p/therm, with forward prices roughly double their level at the start of the year.

Ofgem’s household price cap rose 4% on 1 October, and forecasts published in late September point to a further rise in January, with estimates ranging from about £1,870 to over £2,100 a year for a typical home. Ofgem will confirm the January figure by 25 November.

Businesses have no price cap at all. Commercial contracts follow the wholesale market, so any organisation renewing this winter, or on a variable tariff, is exposed to these movements. Non-commodity costs such as network and policy charges have also risen this year.

El Niño: a historic event is now likely

The US Climate Prediction Center’s 8 October update puts the chance of a historic El Niño, stronger than any since records began in 1950, at 83% for October to December. A strong to very strong event is expected to last through to early 2027.

El Niño’s effect on UK winter weather is hard to predict, so we would not read it as a forecast for Britain. What it does do is add to global weather extremes, and this year has already shown how weather moves energy markets. Summer 2026 was the UK’s hottest on record, and the grid operator issued a rare summertime margin notice during the June heat.

Compliance dates to diarise

• 5 December 2026: second and final ESOS Phase 3 action plan progress update due.
• 31 December 2026: ESOS Phase 4 qualification date. If you are a large undertaking on this date, you must comply by 5 December 2027.
• 30 November 2026: applications close for the British Industrial Competitiveness Scheme, which can cut eligible manufacturers’ electricity costs by up to around £40/MWh.

ESOS Phase 4 now asks organisations to report the energy savings they actually achieved and to explain any Phase 3 actions they did not carry out. Estimates are much harder to defend than metered figures.

What it means for your sites

When prices are volatile, the businesses that cope best are the ones that know exactly where their energy goes. Sub-metering turns a single monthly bill into data for each building, floor, process or tenant. That helps you:

• find waste quickly, such as plant running overnight or at weekends;
• back up energy-saving projects with measured before-and-after figures;
• give ESOS assessors and SECR reports real data rather than estimates;
• recharge tenants and departments fairly for what they use.

ND Metering Solutions has designed and manufactured sub-meters and current transformers in the UK since 1973. If you would like help working out where to meter, our technical team can advise on the right meters and CTs for your installation.