Wholesale energy markets have turned volatile again, and care providers approaching a contract renewal are facing a genuine decision: lock in price certainty now, or stay exposed to the market in the hope of a better deal later.
There's no universally "right" answer here. It comes down to how much risk your organisation is comfortable carrying, and how much you value budget certainty over the next 12 months.
Wholesale gas and electricity prices had started to ease in the run up to the recent bank holiday weekend, as demand softened.
That eased position didn't last. Renewed tension in the Middle East this week, including military action affecting the wider Gulf region, has pushed prices back up. There have since been signals from Iran that a de-escalation could follow, tied to an earlier interim agreement aimed at ending the conflict and reopening a key shipping route for gas exports.
At the same time, gas supplier Qatar Energy has extended a "force majeure" (a formal notice that it can't guarantee deliveries) on some LNG shipments, meaning gas supply through the region remains constrained for now.
It might seem like a distant issue, but the UK imports a meaningful share of its gas as LNG, and the wholesale market that sets UK prices is closely linked to gas markets across Europe. When supply is disrupted anywhere in that chain, particularly from a major exporting region, it tends to feed through to the price UK businesses pay, even without a direct trading relationship with the countries involved.
Taken together, this leaves the market unusually finely balanced, and prices could move meaningfully in either direction over the coming weeks and months.
Both outcomes are realistic. That's what makes this a harder-than-usual decision for care providers approaching renewal.
Broadly, care providers approaching an energy contract renewal have two options.
Fix your price now. This secures cost certainty for at least the next 12 months and removes your exposure to any further market increases. The trade-off is that if prices do fall later, you won't benefit, as you'll already be locked into today's rate.
Stay exposed to the market. This keeps the door open to a lower price if the situation calms down, but it also means your costs could rise, potentially significantly, if disruption continues into winter.
Neither option is inherently better. It's a question of whether your organisation would rather have certainty over its energy budget, or is willing to accept some risk in exchange for the chance of a lower rate.
This is also a useful reminder that wholesale market movements like these are a separate issue from other energy-related announcements affecting care homes, such as the temporary 0% VAT rate on qualifying electricity from October 2026. A lower VAT rate doesn't protect against wholesale price movements, so it's worth considering both when reviewing your position ahead of renewal.
Why are wholesale energy prices rising again?
Prices eased slightly ahead of the recent bank holiday weekend but have since risen due to renewed conflict in the Middle East, which has raised concerns about gas supply disruption through the region.
Could energy prices fall from here?
Yes, they could. If tensions in the region ease and gas supply routes reopen fully, downward pressure on prices would be expected. However, the situation remains unresolved, and prices could equally move higher if disruption continues.
Why is gas supply in the Middle East relevant to UK care home energy bills?
The UK's wholesale gas market is heavily influenced by global supply, and disruption to major gas export routes affects prices here even though the UK doesn't rely directly on that supply. A supplier in the region has also extended a formal notice limiting guaranteed deliveries, adding to supply-side uncertainty.
Should our care home fix its energy contract now, or wait?
There's no single right answer, it depends on your appetite for risk. Fixing now removes exposure to further price increases but means missing out if prices later fall. Staying exposed keeps that upside available but carries real risk if the situation worsens over winter. Speaking to your energy adviser about your specific renewal date and consumption can help you weigh this up.
When is the best time to review our energy contract?
Generally, the earlier you start reviewing your options ahead of a renewal date, the more flexibility you have to make a considered decision rather than a rushed one, particularly in a volatile market like the current one.
Energy markets are moving quickly at the moment, and the right decision will depend on your organisation's specific circumstances, including your renewal date, consumption, and appetite for risk.
Quality Care Group's Energy team monitors wholesale gas and electricity markets closely and can talk you through what's currently happening, what it means for your upcoming renewal, and the options available to you.
If you're approaching an energy contract renewal and want to talk through your options in the current market
