Latest Market Alert | 22 July 2026
Executive Summary
Britain’s energy regulator, Ofgem, is overseeing an independent review of the National Energy System Operator’s (NESO) management of grid operations during the severe heat experienced between 22 and 26 June 2026.
The review will examine operational decision-making, record-keeping and the resilience of the electricity system during a period in which high temperatures increased cooling demand and placed pressure on generation and network capacity.
During the heat event, NESO issued a rare Electricity Margin Notice warning that available electricity supply could become tighter than normal as demand increased.
Why it matters
Extreme heat can affect businesses through multiple channels simultaneously, including:
- Electricity interruption or voltage instability.
- Cooling-system failure.
- Reduced employee productivity.
- Unsafe workplace conditions.
- Transport disruption.
- Equipment overheating.
- Loss of temperature-sensitive stock.
- Water restrictions.
Many business continuity plans remain focused on fire, flooding or cyber incidents and do not adequately consider prolonged heat combined with electricity-system stress.
UK Impact
Businesses dependent upon data centres, refrigeration, manufacturing equipment or electrically powered processes should review whether existing resilience arrangements remain sufficient during extended periods of high temperatures.
Demand for cooling typically increases at the same time that parts of the electricity system operate less efficiently.
Employers also remain responsible for maintaining safe working environments during periods of extreme heat.
Global Impact
The European Commission estimates that approximately €1.2 trillion will be required to upgrade and expand Europe’s electricity grids by 2040 to support electrification and future demand.
Periods of extreme heat may increasingly affect interconnected European electricity markets, influencing both energy prices and supply resilience.
Our View
Extreme heat should now be incorporated into enterprise risk management and business continuity planning rather than being treated solely as a facilities management issue.
Recommended actions:
- Identify operations dependent upon uninterrupted electricity and cooling.
- Test backup generators, UPS systems and fuel arrangements.
- Review temperature monitoring for equipment and stock.
- Confirm business interruption insurance responds appropriately to utility failures.
- Introduce heat-specific employee welfare procedures.
- Assess supplier exposure to electricity disruption.
- Develop manual contingency arrangements for prolonged power interruptions.
Risk Indicator: HIGH
Disclaimer
The information contained within this Market Alert is provided for general market awareness and informational purposes only. It does not constitute financial, investment, legal or insurance advice and should not be relied upon when making commercial or investment decisions. Whilst every effort has been made to ensure the accuracy of the information at the time of publication using reputable and independently verified sources, market conditions, legislation and regulatory guidance can change rapidly. Readers should obtain appropriate professional advice before acting upon any information contained herein.
Invictus Risk Solutions LLP – Helping organisations stay ahead of emerging risks through informed insight and independent analysis.