Energy prices remain a major concern for households across the UK, and recent global events have understandably raised new questions. In this update, we want to explain what’s driving current changes, what regulators are doing, and most importantly, what it means for you as a resident on a heat network.
How global events can influence energy prices
You have likely seen news coverage of the continuing conflict in the Middle East. While this may feel far removed from our everyday lives in the UK, it’s having a direct impact on global energy markets.
The UK imports around 37% of its total primary energy. When geopolitical tensions rise, especially in regions that are key to oil and gas production, this can create uncertainty in supply. Markets typically react to this uncertainty by increasing wholesale energy prices.
While the conflict in the Middle East has caused immediate fluctuations, alternative export routes and other global production sites help keep supplies broadly stable. However, sustained instability could lead to increases in wholesale costs over time, which may then feed through into heating & hot water tariffs.
The good news is that the UK is reducing its reliance on imported energy. Since the early 2010s, imports have dropped nearly 50% meaning prices should become less sensitive to international events in the future.
Will my heat network tariffs increase because of the conflict?
Not immediately. Heating & hot water tariffs do not automatically increase because of overseas conflict or market headlines. Your heat supplier will review your tariff every 6-12 months rather than in response to short-term market changes. This helps ensure the tariff reflects the true cost of operating the heat network. Reviews also usually align with bulk fuel contract renewals.
Long-term bulk gas supply contracts
Heat suppliers buy gas in bulk under annual or multi-year contracts. These longer-term arrangements help protect heat network tariffs from sudden daily or weekly price spikes. If costs change, the effect is usually gradual, not immediate.
Greater transparency for heat network tariffs through Ofgem reporting
Unlike domestic gas and electricity customers, heat network residents are not currently covered by Ofgem’s energy price cap. However, regulation is evolving.
From this year onward, heat suppliers will be required to share their tariffs and cost components to Ofgem. This is a positive step toward transparency and will allow Ofgem to assess whether any future rules or price protections are needed for residents on heat networks.
Heat network suppliers and operators are also expected to actively manage risks, secure fair prices, and follow Ofgem’s new fair pricing guidance.
What can I do if I’m worried about my energy costs?
Many factors influencing energy prices sit outside individual control. However, there are still practical steps you can take to manage your energy costs.
Review your usage: Small changes can lead to meaningful savings. Take a look at our ‘Resident guide to heating & hot water’ for simple tips on how to reduce consumption without sacrificing comfort.
Seek support: If you’re finding it difficult to manage your energy costs, you’re not alone, and there’s help available. Aside from speaking with our team, several independent organisations can provide free, impartial advice on budgeting, efficiency, and access to grants or assistance schemes where available. Read more on this in our ‘Financial support and guidance’ help sheet.
Global events, market conditions, and regulations all influence energy pricing. While recent developments may feel uncertain, it’s important to note:
- There is no immediate change to your tariff solely due to recent global events
- Regulation of heat networks is progressing, with a focus on fairness and transparency
- Support and guidance are available to help you manage your energy use
We’ll continue to keep you updated as the situation evolves and as new regulatory developments are introduced. In the meantime, you can find more details on how heat network regulation is changing in our dedicated blog on the current state of heat network regulations.
