Heatwave drives sharp rise in GB electricity prices

25 June 2026

Britain’s second heatwave of the year has pushed wholesale electricity prices sharply higher, with high temperatures reducing the output capability of both solar panels and gas-fired power stations at a time of rising demand.

Analysis by energy market intelligence firm Montel said temperatures across Great Britain are currently 8C to 10C above seasonal norms. Evening peak power prices between 19:00 and 20:00 on Tuesday reached £248.39 per megawatt-hour (MWh), up more than 75% from £139.13/MWh during the same period a week earlier.

Electricity demand was forecast to peak at around 34GW on Tuesday, exceeding any daily peak recorded in the previous month and surpassing levels seen during May’s heatwave. Iincreased use of air conditioning and cooling systems is contributing to higher demand.

Although sunny conditions have boosted renewable generation, extreme heat can reduce the efficiency of solar panels. According to the analysis, solar panel efficiency typically falls by between 0.3% and 0.5% for every degree Celsius above 25C.

Gas-fired combined-cycle gas turbine (CCGT) plants are also affected by higher temperatures. These facilities can lose between 0.5% and 0.9% of power output for each degree above their baseline operating temperature.

Montel’s GB power market expert, Noemie Baud, says:

“CCGT output is temperature dependent. Air is less dense at higher temperatures, so you get less air, and therefore less fuel into the unit, meaning that the power output declines. This can lead to fossil-fuel generators generating up to 15% less power than their baseline.”

The situation has been worsened by relatively low wind generation in both Great Britain and continental Europe. With less wind power available, electricity systems have become more reliant on thermal generation during periods of high demand, adding further pressure to wholesale prices.

Montel says market conditions are changing the way conventional generators operate. Strong solar output during the day has lowered daytime prices, meaning some gas-fired plants only become profitable during the evening peak. That reduces the number of hours over which operators can recover start-up costs, increasing the price needed for their electricity.

Across Europe, high temperatures have also increased power prices. French nuclear generation had faced restrictions linked to warmer river temperatures, while demand for cooling had risen in several countries. As a result, electricity exports that would normally flow to Great Britain during the evening peak have increasingly been directed to European markets where prices are higher.