From crisis to confidence: what small businesses can learn from the last energy crisis

The past few years have reshaped how small businesses think about energy and risk - firstly they were hit by COVID and then by the energy crisis. For businesses that opened in 2020 only 47%  were still trading in 2023, it was a tough few years on business owners and their employees. 

Prices rose sharply in 2021 driven by global and geopolitical events causing supply issues - this is known as the energy crisis. This article explains what drove the last energy crisis, how small business energy prices were affected, what the market looks like now and how events in the Middle East could influence future business energy prices. We want to help small business owners feel informed about what decisions to make in this new period of instability and whether they can learn from past events. 

What happened during the last energy crisis and what was the impact on energy prices for small businesses 

Between 2021 and 2023, non‑domestic electricity prices in the UK rose dramatically. According to the Office for National Statistics (ONS), average non‑domestic electricity prices increased from 14.81p/kWh in early 2021 to a peak of 28.39p/kWh in late 2023 - a rise of over 90%. Gas prices followed a similar trajectory, contributing heavily to cost pressures across industry sectors. 

Long‑term trends show that prices were gradually increasing due inflation and more recently due to network costs. However, the crisis dramatically accelerated these increases, with smaller businesses paying significantly more for each unit of electricity and gas compared with two decades prior. 

What did that mean for a small business outgoings? Cornwall Insight reported that a typical SME such as a pub, restaurant or independent retailer pays on average £5,000 more per year than before the crisis, with annual electricity bills forecast to remain around 70% higher than 2020–2021.

Contributing factors to the energy crisis:

• A sudden rebound in global energy demand post‑pandemic
• Reduced gas supplies internationally
• The Ukraine conflict, which pushed European wholesale gas prices to historic highs
• The UK’s heavy dependence on electricity imports vs renewals and nuclear generation
• Lack of wind in the UK impact wind turbine generation 

Some called this a ‘perfect storm’ which caused unprecedented increase in small business prices. 

What happened to those on fixed prices? 

Business owners who were already on a fixed tariff, or locked in early when there were signs of instability, were protected from these price rises until their fixed rate ended. This means that these businesses electricity and gas prices would have remained at pre-energy crisis levels. 

What happened to those on variable or deemed tariff?

These small businesses would have seen their prices fluctuate with the market. Some proactively decided to weather the storm – hoping prices would drop, others locked into fixed contracts to avoid any further increases and impacts on bottom line. There were some who hadn’t considered the impact on their prices and would have only seen this when their supplier contacted them or they received their bill. Some non‑domestic rates exceeded 44p/kWh for electricity in 2025 depending on region and meter type.

What happened to prices after the energy crisis?

After the energy crisis, costs remained higher than they were before 2021, but that trend of price increase had been around long before the energy crisis, just not as drastic. The market started to stabilise in 2024/2025 with price increases being more gradual. An interesting takeaway is that overall prices never returned to pre-energy crisis levels. 

Was there any support available to businesses in the energy crisis?

These schemes are now closed. At the time, there were two small business support scheme in the energy crisis:

Energy Bills Relief Scheme (EBRS) capped wholesale energy prices for non-domestic customers. The scheme ran for six months, until March 2023, during the height of the energy crisis. 

Energy bills discount scheme (EBDS) replacing EBRS in April 2023. EBDS offered a discount on non-domestic gas and electricity unit rates.

No support has been announced in the current climate.

What the business energy market looks like today

Key features of the current market and how the Middle East is affecting energy prices:

Geopolitical instability in the Middle East continues to pose one of the biggest risks to UK energy costs and likely further increased costs for small business energy. Prices are rising as we see similar trends to the 2021 energy crisis. This year between 28 February and 12 March, wholesale gas prices have risen by 67%. That's around a 60p increase per unit rate of electricity. 

This wholesale market volatility and risk premiums mean increased costs and risks for supplier - in turn this is reflected in business tariff pricing. This can also result in shorter tariffs being removed from the market, with longer term tariff prices being more accessible.  

Rising non‑commodity costs (network, policy, system charges)
Businesses are expected to see an increase in TNUoS transmission charges from April 2026 onward. Standing charges could nearly double for many businesses and continue rising beyond 2030 to fund grid upgrades.

Continued no price cap protection for businesses
Unlike households, small businesses operate fully within the wholesale market, there’s no price cap like you see for home tariffs.  

What small businesses should do next

While uncertainty remains, businesses can take proactive steps to shield themselves from future volatility.

1. Review contracts carefully

Get to know your energy spend and understand your contract. If you’re looking for predictability and to shield from future price rises then a fixed contract is for you. You can get a quote for in 60 second with EDF Small Business.

2. Consider whether fixed or flexible contracts make sense

• Fixed contracts offer budget certainty, avoid unpredictability in wholesale market costs
• Flexible tariffs can benefit those with risk tolerance and want flexibility  

3. Invest in energy efficiency

The best way to reduce your bill is reduce your spend - this way you’re saving your business both cash and carbon. Energy efficiency improvements such as LED lighting, smart meters and HVAC optimisation can deliver lasting cost reductions and reduce exposure to future spikes. Access free industry specific energy advice here.

4. Explore on‑site renewable generation

Solar and battery systems continue to grow in adoption, by generating your own energy – you can power your business for free. Solar panels generate the energy and battery storage means you can store that energy until your business needs it. Find out how to invest in sustainable upgrades to help your business save cash and carbon.

5. Monitor policy changes

Non‑commodity charges such as TNUoS and the RAB levy will rise through the decade. You should keep an eye on these types of changes so you can lock in before new charges are added. We've set up a small business community on LinkedIn to share key energy news with small businesses. 

Our three top tips for business owners in energy uncertainty  

1. Get off a deemed tariff – they are almost always more expensive
2. Lock in early if you know you can afford those fixed rate prices – during the last energy crisis, prices continued to rise and those who locked in early saved long-term
3. Understand your contract, usage and the market – keeping an eye on changes can help you feel confident in your decision 

EDF’s view 

We’re a reliable supplier who has been in the UK market for many years. We’ve been here before and we’re drawing on that experience, working closely across teams and applying the lessons from the last energy crisis. We’re here to help. 

• Reviewing prices daily
• Helping customer who want to – to lock in prices
• Staying in the market where we can when others have paused selling tariffs
• Continued investment in low carbon energy creation in the UK to reduce our reliance on imports 

Conclusion

The last energy crisis demonstrated how vulnerable small businesses are to global shocks. Even though recent months have brought some easing in wholesale markets, structural cost pressures and geopolitical risk in the Middle East continue to shape the UK energy landscape.

By learning from the past and making informed, strategic decisions now, small businesses can strengthen their resilience and protect themselves from the next wave of market volatility.

Give us a call to talk through your small business energy today: 0333 188 6725⁽¹⁾

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