How global conflicts drive energy price surges and what businesses can do about it

Over the last few years, global conflicts have done more than shape the headlines – they’ve driven a surge in energy prices that UK businesses can no longer afford to ignore. From the war in Ukraine to escalating tensions in the Middle East, geopolitical risks have translated directly into higher gas and electricity costs, eating into margins and putting unprecedented pressure on operational budgets.

Why energy prices spike during war

Wars tend to destabilise global supply chains, especially for oil and gas. When a key exporter reduces supply, either through sanctions, damaged infrastructure, or geopolitical manoeuvring, wholesale energy prices rise sharply. We’ve seen this repeatedly in recent history, most notably following Russia’s invasion of Ukraine, where European gas prices surged to unprecedented levels.

This volatility filters directly into UK energy markets, forcing businesses to pay more to keep operations running. Even as energy regulators like Ofgem introduce price caps, businesses are not protected from wholesale market spikes, particularly those on variable tariffs or with high energy demands.

In October 2024, for example, Ofgem increased the electricity unit price by nearly 10% and gas by 14%, a direct consequence of sustained market pressures from ongoing global instability.

Geopolitical risk is now a business cost

The challenge is that energy prices are no longer just about supply and demand, they are about political risk. Every new conflict introduces uncertainty, and for UK businesses, that means unpredictable energy bills, tighter margins, and more difficult financial forecasting.

This is not a short-term issue. Industry forecasts predict that while prices may stabilise, elevated costs are here to stay through 2025 and beyond. Geopolitical instability is now baked into the cost of energy, and businesses must adapt accordingly.

Energy independence as a business strategy

At Low Carbon Energy, we see firsthand how forward-thinking businesses are responding, not by waiting for market correction, but by taking back control of their energy consumption.

Commercial solar is no longer just a sustainability initiative, it’s a hedge against global instability. By investing in on-site renewable generation, businesses are not only reducing their carbon emissions but also insulating themselves from external shocks.

• Predictable costs: Solar generation offers price stability for 20-30 years, removing a key variable from your cost base.
• Faster payback: With the current price trajectory, commercial solar payback periods can be as little as 3 to 5 years
• Energy security: By generating your own power, you reduce reliance on grid energy that is subject to market turmoil.

Real-world business success with solar

This isn’t theory – businesses are already benefiting from making the switch. Crow Wood Hotel, for example, installed a 1,127kWp ground-mounted solar system that now meets 27% of their electricity demand and offsets 196 tonnes of CO₂ annually. The investment wasn’t just an environmental decision, it was a direct response to rising energy usage and market unpredictability.

We’ve delivered similar outcomes across multiple sectors, helping manufacturers, leisure operators, and corporate offices cut costs, secure energy independence, and meet sustainability goals in one move.

Don’t wait for the next crisis

Energy price spikes caused by war and conflict are not going away. Businesses that take proactive steps to control their energy supply will be in a stronger financial and operational position. Solar offers a practical, long-term solution that delivers immediate cost savings and long-term security.

If you’re looking for a way to stabilise your energy costs and future-proof your business against global market pressures, now is the time to consider solar.

Low Carbon Energy delivers commercial solar systems that cut costs from day one while securing your energy future. Contact us today to explore how solar could transform your operations.