Post: Why electricity prices matter and what businesses can do about it

Why electricity prices matter and what businesses can do about it

According to The Adam Smith Institute’s Electricity Tracker, the UK’s industrial electricity prices are dramatically higher than in neighbouring countries, with British industry paying around 81 % more than comparable businesses in France.

Here we spoke to GridBeyond Head of Demand Response UK, Shawn Duckett about business energy costs and what businesses can do to mitigate volatility.

Q: Why are UK electricity prices such a concern for industry?

Electricity is not a marginal cost for many sectors; it’s central to production. For manufacturers, food processors, cold-storage operators, pharmaceuticals, data centres, and other energy-intensive businesses, power can represent a major share of operating expenditure. When electricity costs are persistently higher than in other countries it reduces international competitiveness, puts pressure on margins, and lowers capacity for reinvestment. Over time, this can influence broader economic growth and industrial strategy.

Q: Is high cost the only issue?

No, volatility is equally challenging. Beyond structural price differences, electricity markets have become more unpredictable. Factors such as fluctuating gas prices, geopolitical events, weather-dependent renewable generation, and shifting demand patterns all contribute to price swings. For businesses, volatility creates budgeting uncertainty. Even well-negotiated fixed contracts can expose companies to timing risks or prevent them from benefiting when market prices fall.

Q: How can businesses respond to this volatility?

Traditionally, companies relied heavily on procurement strategies alone, locking in forward contracts to reduce risk. But procurement is only part of the solution. Increasingly, businesses are turning to intelligent energy optimisation technologies that allow them to actively manage when and how they consume power. This is where solutions like FlexPilot from GridBeyond come into play.

Q: What is FlexPilot, and how does it help?

FlexPilot is an AI-driven energy optimisation platform designed to help businesses anticipate and respond to electricity price movements in real time. Rather than treating energy as a fixed overhead, FlexPilot integrates forecasting, predictive analytics, and operational modelling to anticipate price spikes before they occur, shift energy-intensive processes to lower-cost periods, optimise on-site assets such as storage or flexible load and reduce exposure to peak wholesale pricing. The result is that volatility becomes something businesses can plan around rather than simply absorb.

Q: Does this replace procurement strategy?

Not at all. Instead, it enhances it. While procurement secures supply and manages contractual risk, intelligent optimisation platforms help businesses make smarter operational decisions within those contracts. Together, they create a more resilient energy strategy.

In a high-cost environment that additional layer of control can materially reduce overall spend and improve forecasting certainty.

Q: What does this mean for the broader energy transition?

As the UK continues to decarbonise and integrate more renewable generation, market volatility is likely to remain a feature of the system. Businesses that embed energy intelligence into their operations will be better positioned to navigate price swings, maintain competitiveness and support grid stability through flexible demand.

Q: What’s the key takeaway from the Electricity Tracker?

The research underscores a clear reality: UK electricity prices present a structural challenge for industry. But while businesses may not control national policy or wholesale market design, they can control how intelligently they respond. And in an era of price volatility, solutions that turn energy from a passive expense into an actively managed asset (such as FlexPilot) offer a practical pathway toward resilience and long-term competitiveness.