Gas Storage Climbs, Supply Risks Persist
- Professional Energy People
- 15 hours ago
- 6 min read
UK Energy Market Update
August 2025
Market Summary
In August, EU aggregated gas storage levels rose from around 69% at the start of the month to approximately 77% by month-end, though inventories remained 8 percentage points below the five-year seasonal norm. Steady injections, supported by stable LNG inflows, helped the bloc surpass the revised 75% minimum target, while projections from Gas Infrastructure Europe indicated that storage could reach 86% by early November if current trends continued. Despite lagging last year’s levels, the EU remained on track to meet its flexible 90% requirement between October and December, keeping near-term supply risks contained.
Maintenance across the Norwegian Continental Shelf weighed heavily on UK gas supply throughout the month, with unplanned outages at Karsto, Ormen Lange, Aasta Hansteen and Troll cutting flows through the Langeled pipeline. While Hammerfest LNG’s restart briefly supported exports, additional curtailments at Kollsnes and SEGAL-linked fields tightened the system further. From late August, the peak planned maintenance schedule began at Nyhamna, Easington and Troll and will continue into September, taking up to 20% of capacity offline. With Britain more reliant on Norwegian flows than continental Europe, imports fell to minimal levels during the heaviest outages, amplifying price sensitivity.
French nuclear output was hit by heat-related restrictions at river-cooled sites and an unusual jellyfish swarm that forced a temporary shutdown of four reactors at the 5.5 GW Gravelines plant. The delays reduced cross-border exports and briefly tightened UK imports, adding support to power and gas prices. By late month, availability recovered above 45 GW, easing regional supply pressures.
US-led efforts to broker a ceasefire between Russia and Ukraine kept energy markets on edge. The Alaska summit between Presidents Trump and Putin failed to deliver an immediate truce, leaving UK and European gas markets sensitive to the potential return of Russian flows and any easing of sanctions. Russia’s demands on territory and security guarantees for Ukraine, combined with Kyiv’s uncertain participation, maintained market uncertainty and price volatility, reinforcing the UK’s reliance on alternative supplies.
Russia and Ukraine intensified attacks on each other’s energy infrastructure, hitting gas and oil facilities vital for winter heating and fuel supplies. Russia struck gas stations and compressor facilities in Ukraine’s Odesa and Poltava regions, including the Orlovka interconnector, while Ukraine targeted Russian refineries, the Druzhba pipeline, and fuel depots. These attacks caused temporary disruptions to flows to Hungary, Slovakia, and domestic Ukrainian supplies, adding volatility to regional energy markets and underscoring the strategic role of energy infrastructure in the conflict.
National Grid plc announced that the 300MW Thurrock Battery Energy Storage System has been energised. With a total capacity of 600MWh, the facility can supply power to around 680,000 homes. Battery storage is vital for balancing variable wind and solar generation while improving the overall efficiency of the National Grid. Thurrock enhances the UK’s ability to store surplus renewable energy for use when demand is highest, reducing reliance on gas-fired power plants to maintain grid stability.
Net Zero News
SSE Renewables has secured a crucial consent from the Scottish Government for its 4.1GW Berwick Bank offshore wind farm, marking a significant step toward developing what could become the world’s largest offshore wind project.
https://www.energylivenews.com/2025/08/01/berwick-bank-worlds-largest-offshore-wind-project-is-a-go/
National Grid has launched an £8 billion Electricity Transmission Partnership to speed up the delivery of critical infrastructure and advance the UK’s clean energy goals. The initiative will support the construction or upgrade of approximately 130 substations across England and Wales by 2031, forming part of National Grid’s broader £35 billion RIIO-T3 investment programme.
Nearly half of UK MPs believe electricity costs should be reduced to encourage households to replace gas boilers with greener heat pumps. A new survey for clean tech company Aira highlights a significant gap between political ambition and awareness of policy, as Westminster recognises the high cost of electricity as a key barrier to achieving net zero.
The UK Government is urged to adopt a pragmatic, regulated oil and gas policy to safeguard energy security, cut import dependence, and support the net zero transition. Despite emissions falling over 50% since 1990 to under 1% of global totals, oil and gas still supply three-quarters of the UK’s energy, with gas fuelling over 85% of domestic heating and cooking.
A UK offshore wind farm will feature the large-scale use of recyclable blades, reportedly a first for the country. Half of RWE’s 1.4GW Sofia Offshore Wind Farm, off the north-east coast, is being equipped with these “pioneering” rotor blades, which are made using an innovative resin.
Ofgem has tasked the British Standards Institution (BSI) with overseeing new governance for standards in the digitalisation of the energy system, supporting the transition to net zero. The regulator requires all network companies to implement the Common Information Model (CIM) in their long-term development statements (LTDS) to enhance the consistency, accessibility, and usability of network data.
The Government has unveiled a new programme offering tailored support to oil and gas workers in the North East, helping them transition into the sustainable energy sector.
The UK’s nuclear regulatory framework is “not fit for purpose,” with “costly and complex” rules delaying projects. An independent government taskforce is calling for a “radical reset” to accelerate critical nuclear developments and attract more investment to Britain.
Electricity & Gas Prices
UK wholesale gas and electricity prices fell through August 2025, easing from summer highs. Bearish drivers included abundant LNG imports, strong nuclear output from returning French reactors, and mild domestic weather reducing gas-fired demand. Prices were briefly supported by Russia-Ukraine attacks on energy infrastructure, US sanctions on Russian oil buyers, and cooling-related restrictions on French nuclear plants during heatwaves. Overall, declining prices reflected improved supply and subdued demand, though markets remain alert to geopolitical and weather-driven volatility.
Flexible Purchasing
EPEX Price
Some of our flexible purchasing customers are buying on EPEX, a European auction for power. Because they auction every hour of each day, customers get the “market average” price as opposed to a fixed-term contract over e.g. a 12-month period. Being on this product means that you will pay the average of each day for the month and once the market falls the price will follow.
The EPEX price finished the month with an average of 7.04 p/kWh (commodity). With the non-commodity added to this, the overall rate will be around 17.94 p/kWh+.
Carbon Prices
In August 2025, European Union Allowance (EUA) prices averaged around €71.90 per tonne, up slightly from July’s average of €70.64.
The modest gain reflected stabilising sentiment, supported by ongoing policy discussions in Brussels over emissions targets and the Carbon Border Adjustment Mechanism. However, prices remained range bound as softer energy markets, muted industrial activity, and seasonal demand patterns limited upward momentum. Looking ahead, expectations of tighter supply frameworks from 2026 through reduced free allocations and ETS reforms continue to underpin a longer-term bullish outlook, while short-term volatility remains driven by macroeconomic and market flows.
Oil Market
4th - Oil prices fell as markets anticipated another OPEC+ output increase in September, despite support from concerns over potential disruptions to Russian shipments to India. OPEC+ agreed to raise production by 547,000 barrels per day, citing strong economic conditions and low stockpiles.
8th - Brent crude prices have dropped sharply over the past week, falling for six straight sessions and losing 8.3% since 30th July, according to ICE data. Weakness was driven by global economic uncertainty, subdued Chinese demand, and a looser OPEC+ policy.
13th - Oil prices fell after the IEA noted that supply is expected to outpace demand this year, while investors awaited the upcoming meeting between U.S. President Donald Trump and Russian President Vladimir Putin.
18th - Oil prices rose after White House trade adviser Peter Navarro warned that India’s purchases of Russian crude were funding Moscow’s war in Ukraine and needed to stop. Traders also monitored a meeting between U.S. President Donald Trump and Ukrainian President Volodymyr Zelenskiy as efforts continued to reach a peace deal to end Europe’s deadliest conflict in 80 years.
22nd - Oil prices were little changed as hopes for an imminent peace deal between Russia and Ukraine faded, leaving prices on track for their first weekly gain in three weeks.
28th - Brent crude oil is trading lower as market sentiment remains bearish, despite a recent 2.4-million-barrel draw from US inventories. With the US summer driving season ending, analysts expect demand to ease in the world’s largest oil consumer.
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