For schools across the UK, energy has become one of the most difficult budget lines to predict and control – as well as one of the biggest.
Rising wholesale prices, geopolitical instability, increasing network charges, and the growing pressure to decarbonise are creating a perfect storm for education leaders already operating under tight financial constraints.
Zenergi, a leading energy and carbon management consultancy, shares practical guidance for schools navigating energy market volatility, controlling costs, and planning for a more sustainable future.
Why schools need a smarter energy strategy
Energy represents one of the largest overheads for many schools. When managed poorly, costs can escalate quickly and unexpectedly. When managed well, however, savings can be significant enough to free up funding for frontline educational priorities.
The challenge facing schools today is being driven by several overlapping pressures:
- Volatile global energy markets
- Increased reliance on imported liquefied natural gas (LNG)
- Growing non-energy charges on electricity bills
- Pressure to reduce carbon emissions
- Reduced or paused grant funding schemes
- The need for more accurate budgeting and forecasting
The good news is that with the right procurement strategies, operational improvements, and planning, schools can mitigate these challenges, reduce energy waste, improve forecasting, and create a clearer route toward net zero.
Why global events affect school energy bills
Many will remember the energy crisis of 2022, when Russia’s invasion of Ukraine caused major disruption across European gas markets. While today’s situation in the Middle East is different, the recent tensions demonstrate how quickly geopolitical events can influence UK energy costs.
The Strait of Hormuz remains one of the world’s most important energy shipping routes, carrying roughly 20–25% of global oil supplies and a significant proportion of global LNG shipments. Any disruption in the region immediately affects international energy markets.
Although the UK does not directly import large volumes of energy from the Middle East, wholesale gas and electricity prices remain heavily influenced by global market sentiment. This is because energy traders quickly build “risk premiums” into pricing whenever supply routes appear threatened.
This matters because gas still plays a central role in UK electricity generation. Even as renewable energy capacity grows, gas-fired power stations continue to set the marginal electricity price in many periods.
The UK is also increasingly dependent on LNG imports as North Sea gas production declines. Unlike countries such as Germany or France, the UK has relatively low gas storage capacity, leaving the market more exposed to short-term supply disruptions and international pricing volatility.
Why school energy bills keep increasing
One of the biggest misconceptions about energy bills is that they are predominantly made up of wholesale energy prices. This may have been the case previously but now less than half of your bill is the cost of the energy itself.
A growing proportion comes from non-commodity charges – these are the costs associated with maintaining and upgrading the UK’s energy infrastructure.
One major example is TNUoS (Transmission Network Use of System) charges, which fund upgrades to the national electricity transmission network. These charges are rising due to:
- Investment in grid infrastructure
- Expansion of renewable energy generation
- Clean Power 2030 targets
- The new RIIO-3 regulatory price control period
In addition, new schemes such as the Nuclear Regulated Asset Base (RAB) model are adding further costs to support projects like Sizewell C, a major nuclear power station under construction on the Suffolk coast.
For schools, this means that even if wholesale energy prices stabilise, you may still face increased costs because of infrastructure and policy-related charges.
The biggest change to the electricity market in decades
Schools also need to prepare for Market-wide Half-Hourly Settlement (MHHS), described as the biggest reform to the UK electricity market since deregulation in 1989.
Under MHHS, all electricity meters will transition to half-hourly settlement between 2025 and 2027. This means suppliers will use actual usage data every 30 minutes rather than relying on estimated consumption profiles.
The benefits include:
- More accurate billing
- Better visibility of energy usage
- Access to flexible tariffs
- Improved opportunities for energy efficiency
- Greater control over consumption patterns
The transition also creates an opportunity for schools to improve data visibility and make more informed decisions about when and how energy is used. However, schools that delay meter upgrades may face significantly higher costs.
Procurement strategy matters more than ever
One of the most important decisions schools make is how they approach energy procurement. Too often, procurement is viewed simply as a renewal exercise. In reality, it should form part of a broader risk management strategy.
There is no single “best” strategy. Procurement should reflect your school’s risk appetite, budget certainty requirements, operational priorities, and long-term sustainability plans.
Fixed procurement
Fixed contracts lock prices for a set period, typically between one and three years.
Advantages include:
- Budget certainty
- Protection from market spikes
- Simpler management
The downside is that schools cannot benefit if market prices fall.
Flexible procurement
Flexible purchasing allows organisations to buy energy in tranches and respond to market movements.
Advantages include:
- Potential cost savings
- Greater transparency
- Opportunities to benefit from falling markets
However, flexible strategies require active management, monitoring, and specialist expertise.
The most effective strategies often take a longer-term view using a rolling two- or three-year “hedging horizon” to smooth volatility and improve forecasting.
Practical quick wins to reduce energy waste
While procurement strategy matters, operational efficiency remains one of the fastest ways to reduce costs.
Many schools still have opportunities to achieve significant savings through relatively simple measures, such as:
- Reviewing heating and hot water set points
- Checking out-of-hours energy use
- Upgrading legacy lighting to LED
- Installing motion sensors
- Improving insulation
- Identifying redundant equipment
- Reviewing kitchen energy usage
- Conducting regular energy audits
Conducting regular “energy walkarounds” involving staff and students, can identify obvious waste such as lights, screens, heating, or equipment left running unnecessarily. These activities also help build awareness and encourage long-term behavioural change.
A practical way forward for schools
The key takeaway for schools in 2026 is clear: energy management must become proactive rather than reactive.
Schools that perform best are not necessarily the ones with the largest budgets. They are often the ones with clear visibility of their energy use, realistic forecasting, and a willingness to take practical action early.
That is why Zenergi is delivering energy and carbon management training for school leaders. In an exclusive partnership with EdExec, the ISBL-accredited Energy and Carbon Management training is available throughout 2026 at venues across the UK.
School leaders will learn how to better manage their energy use to reduce costs and carbon with practical, education-focused guidance. A limited number of complimentary tickets are available at each workshop which can be booked here.
In a challenging financial environment, better energy management is no longer optional. It is an essential part of protecting school budgets, supporting sustainability goals, and creating more efficient learning environments for years to come.
Zenergi supports more than 3,000 schools with compliant gas, electricity and water procurement; bill validation; compliance services; energy efficiency improvements; decarbonisation strategies and renewable generation solutions.
Get in touch today to explore how Zenergi can help you achieve energy savings plus a whole lot more. Whether it’s meter upgrades to get ahead of MHHS, or procurement strategies to navigate market uncertainty, our expert team are ready to help you achieve your energy, cost and carbon reduction objectives: zenergi.co.uk
