Wholesale market indicators

These charts represent the wholesale prices that suppliers typically face when buying gas or electricity to supply their customers. The cost of suppliers purchasing wholesale energy is the largest component of a customer’s bill. Wholesale prices can vary significantly compared to other components of a household bill. We take wholesale prices into account when setting the level of the Price Cap every quarter.

Day ahead contracts show the price evolution in the spot market. These markets can be very volatile and impact the forward price trends shown above.

Ensuring there is sufficient gas or electricity to meet demand is a key outcome of the energy market. It provides consumers with certainty they can get heat and power when they require it, and helps drive economic activity. 

Highly liquid markets imply developed markets where it is easy to buy and sell energy at reliable prices. Liquid markets should have sufficient numbers of participants willing to buy and sell so that prices are not easily moved by a few small trades. 

The amount of competition in the energy market can have a strong impact on final wholesale prices. The more pressures there are from companies competing with one another, the more likely the wholesale market will reflect the true economic costs to supply energy.

A more sustainable energy market has significant impacts on levels of pollution and greenhouse gas emissions. Investment is also essential to ensure that the market can meet the demands of current and future consumers.  

We have selected this range of indicators to support general understanding of market outcomes, to provide a picture of the market where it is not produced elsewhere, or where there is scope for us to set a clear methodology for the data.

Our data comes from sources that are either publicly available, provided by third parties or from Ofgem information requests. Specific sources and relevant dates are listed with each indicator. We are grateful to third parties for allowing us to reproduce their data. 

We will review the indicators periodically to ensure they continue to help promote transparency and understanding of the wholesale energy market.