Representatives from Energy UK recently joined CECA members for a webinar focused on the impacts of the Middle East conflict on UK energy prices. Ben Goodwin, CECA’s Director of Policy and Public Affairs, looks at the key points from the session in this short article.
For background, Energy UK is the trade association for the energy industry, representing companies that range in size from start-ups to major electricity generators, grid and infrastructure developers, and energy suppliers. Energy UK members work across power, heat, transport and flexibility.
CECA members were briefed on the manner in which wholesale energy prices have soared since the start of the conflict, with the UK’s reliance on gas exposing domestic and business customers to significant cost pressures.
The inflationary impacts of the cost of energy are already applying upward pressure on commodity prices and creating significant supply chain issues that are likely to be felt for some time yet.
For CECA members, the situation poses several critical questions.
How long will higher energy prices and associated supply chain pressures last? What action is the Government taking to alleviate these impacts? What can civils contractors do themselves to mitigate the effects of the Middle East conflict?
Discussion during the webinar focused on some of these questions, with the Energy UK representatives pointing out how the Government just this week has expanded the number of businesses that will be part of the Energy Intensive Industries Scheme from April next year.
However, the picture for fuel duty is less clear, with a temporary 5 pence per litre cut announced at the Autumn Budget in 2025 set to expire after August 2026. This will place a further strain on CECA members already facing higher fuel costs as a result of the events unfolding in the Middle East.
More broadly, the closing conversations at the webinar considered the impact of the Government’s ambitions for renewable energy delivery on future electricity prices, with the prevailing thought that this will lead to a downward trend as electricity pricing is decoupled from that of gas.
There is, of course, significant upgrade work that needs to be delivered to the transmission grid to enable this to happen, which many CECA members will be at the forefront of delivering.
CECA continues to raise its members’ concerns in relation to the impacts being felt as a result of the conflict in the Middle East directly with Government and via the Construction Leadership Council.
If you would like to share any specific thoughts with the CECA team on how we do this to best effect, please get in touch at enquiries@ceca.co.uk.