Smart meters now a condition for fixed energy deals as energy costs rise again

Closer to home, the Government has confirmed that, from September 2027, a pub will need a smart meter, or agree to one, to sign a new fixed price contract. Both matter for your next renewal.

Market update

On 11 September, drone strikes shut Saudi Arabia’s east-west pipeline, which had been carrying Gulf oil to the Red Sea while the strait stayed closed. Repairs will take weeks. The Oman talks that might have reopened the strait were postponed with no new date.

Oil hit its highest price last week since July and UK gas for October traded above 200p per therm this week against about 181p a fortnight ago. Our current view is that wholesale costs are more likely to rise than fall while neither route out of the Gulf is working properly. They cannot rise forever.

However, economies cannot run on energy at these prices for long, so a resolution has to come, and when it does we would expect prices to drop sharply at first. Refilling Europe’s stores will take longer, so after that first drop we expect a slow drift lower rather than a straight return to where we started.

Keeping an eye on storage, Europe’s stores were about 68% full on 14 September, a record low for the time of year and short of the 80% winter target. The reason is simple: Qatar’s gas reaches Europe through the Strait of Hormuz, and with the strait closed since the war began those cargoes stopped, so the summer refill never caught up.

Norwegian maintenance and an unplanned outage at Troll have cut flows to Britain on top. For a pub that is the winter risk. The buffer against a cold snap is thin, and winter is when the kitchen and the heating burn most of the gas. Few buyers are chasing spare cargoes at these prices, which is what keeps them below their peak but, if it turns cold, there is little in store to stop this winter’s contract prices rising again.

Weather is not the problem this fortnight. The Met Office expects a fresh week, then drier and warmer into late September, with no early cold signal. That eases demand. It does not fill Britain’s stores, which hold about a week of winter demand, and it does little for Europe’s.

Business energy costs

Wholesale gas for October is now 6.9p per kWh, against 2.5p in late February. Electricity is 15.5p against 6.9p. Gas has nearly trebled, electricity has more than doubled, and both gaps are wider than a fortnight ago. Quoted rates have moved much less.

Suppliers buy their energy in advance, so a wholesale move feeds through gradually rather than all at once. That cuts both ways. When wholesale falls, unit rates will not fall as far or as fast, because network, policy and metering charges are built into the rate and are still rising.

Check the standing charge first. In the pub contracts we won this fortnight, it averaged £1.26 a day for electricity and £0.80 for gas, about £750 a year per site before a unit is used, and a pub group pays it on every site. Electricity’s eased back this fortnight while gas’s rose, so compare the daily charge per site as well as the unit rate.

On timing, nobody knows how long quoted rates stay behind wholesale, so if your renewal is in sight it is worth seeing offers now, while that lag lasts. Next summer’s gas is priced about a third below this winter’s. That is a forward price, not a forecast, and it moves with every headline from the Gulf. Renew at a price you can afford and plan around. We will lay out the options but the decision is yours.

The Government is introducing new rules from 1 September 2027, linking new fixed-term energy contracts at smaller business sites, including pubs, to smart or advanced metering. To take out a new fixed deal, your pub will need to have a suitable meter already installed or agree to have one fitted. You do not need the installation completed before signing, but if you decline to agree to it, a new fixed deal will no longer be available and the alternatives could be more expensive.

There are positive reasons to prepare now. Smart meters can mean more accurate bills, fewer manual readings and a clearer understanding of where your pub uses energy, helping you identify waste and keep costs under control.

There is also a fairness benefit. Unpaid energy bills create costs that suppliers can build into prices paid by other businesses, including those that consistently pay on time. Accurate billing, earlier support with payment difficulties and, where appropriate, smart prepayment can help prevent debts building up. Reducing these costs could help ease pressure on prices over time, although it does not guarantee lower bills.

If you run a pub group or tied estate, now is a good time to check which sites still have traditional meters. Nationwide can help you understand the changes and work with suppliers to arrange upgrades ahead of renewal, giving your operators time to prepare and keeping their contract options open.

If you are taking on a new tenancy, sort the supply before you pull your first pint. Until the transfer is done a new licensee is on deemed rates, usually well above any contract rate. Keep the dated lease, the day-one meter reading and the supplier emails together, and bring a stalled transfer to us early. Chasing it is our job, not yours.

Nationwide Energy offers the support you need to make your next energy contract transition smoother, deal with supplier issues, or review your energy consumption.