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Market & Industry Terms
Forward Market
Key takeaways
- The forward market is where energy is bought and sold for delivery weeks, months and years into the future.
- Forward prices drive what suppliers can quote you for a fixed rate contract starting in the future.
- Forward curves react to expected demand, supply, weather, fuel prices and policy — not just today’s spot.
What is the forward energy market?
The forward market covers all the energy trading that locks in a price now for delivery later — anything from next month to several years out. It’s how suppliers, generators and large industrial buyers manage future risk.
For most UK business buyers, the forward market matters because it sets the price your supplier needs to hedge against when offering you a fixed rate contract. The forward curve for the relevant delivery period is the supplier’s cost baseline; the quote you see adds non-commodity costs and a margin on top.
How buyers interact with it
- Most SMEs interact indirectly — through fixed quotes priced off the curve.
- Larger sites on flexible contracts can place purchases at multiple points along the forward curve to average out risk.
- Either way, the forward market is the link between today’s wholesale prices and the renewal window numbers you’ll see next.
