National Balancing Point
What is the National Balancing Point (NBP)?
When a broker tells you gas prices are up, the number moving in the background is almost always the NBP. The National Balancing Point is the virtual marketplace where wholesale gas is bought and sold for Great Britain, and its price sets the foundation of every business gas contract. You never trade on it directly, but it is the single biggest driver of what you pay per unit. Understanding it helps you see why gas prices move and why timing a contract can matter. Here is what the NBP is and how it reaches your bill.
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The NBP is a wholesale pricing hub, not a physical place or a supplier. It is where the market price of GB gas is set, quoted in pence per therm, and it forms the largest single component of a business gas rate.
What the NBP is
The National Balancing Point, or NBP, is the virtual trading hub for wholesale gas in Great Britain. It is the notional point at which gas is bought and sold once it has entered the national transmission system, and the price struck there is the benchmark for the whole GB gas market. It is “virtual” because it does not sit at a physical location, it is a market convention, not a pipeline junction you could visit.
Suppliers, traders and large users buy and sell gas at the NBP. Your business gas price is built on top of it.
How it works
Once gas enters the National Transmission System, it is treated as a single pooled commodity available at the NBP, regardless of which terminal it physically entered through. Participants trade contracts to buy or sell gas at the NBP for delivery on a given day or over a future period. Those trades set a transparent market price that everyone references, from a shipper balancing its position to a supplier pricing your renewal.
Pricing in pence per therm
NBP gas is quoted in pence per therm (p/therm), the traditional unit for wholesale gas in Britain. Your bill, though, charges you in pence per kilowatt hour (p/kWh). The two are linked by a fixed conversion, because one therm equals about 29.31 kWh. That conversion is how a wholesale price quoted in therms becomes the unit rate on your invoice.
A worked example
Say the NBP price is 80 pence per therm. To see roughly what that is per kilowatt hour:
80 p/therm ÷ 29.31 kWh per therm = about 2.7 p/kWh at the wholesale level.
Example only. The wholesale price is just one part of your rate, and the NBP moves constantly, so treat this as illustrative rather than a quote.
Your actual unit rate adds transportation, a share of policy costs, your supplier’s margin and other elements on top of that wholesale figure. But the NBP is the base the whole rate is built from, which is why it dominates price movements.
NBP vs TTF
You will often hear the NBP mentioned alongside the TTF, the Title Transfer Facility, which is the equivalent gas trading hub for the Netherlands and the main benchmark for continental Europe. The two are closely linked because Britain and Europe are connected by pipelines and share the same LNG market, so NBP and TTF prices tend to move together. When European gas is scarce and TTF rises, NBP usually follows.
| Hub | Market | Typical unit |
|---|---|---|
| NBP | Great Britain | pence per therm |
| TTF | Netherlands / continental Europe | euros per megawatt hour |
What moves the NBP price
The NBP responds to supply and demand for gas, so the main drivers are:
- Weather, cold snaps push heating demand up and prices with it.
- Supply, pipeline flows, LNG cargoes arriving or being diverted elsewhere, and storage levels.
- The European market, since NBP tracks TTF closely.
- Power sector demand, because gas-fired generation competes for the same gas.
This is why gas prices can move sharply, and why a quote can look different from one week to the next.
How it reaches your bill
Your supplier buys gas at or around the NBP price, then wraps it in everything else your rate has to cover: transportation across the transmission and local networks, policy costs, metering, its own risk and margin. On a fixed contract, the supplier locks in a wholesale price for your term, so a later NBP move does not change your rate until you renew. On a flexible or pass-through contract, movements can feed through sooner.
Day-ahead vs the forward curve
Gas trades at the NBP for many different delivery periods. The day-ahead price is for gas delivered tomorrow and reflects immediate conditions. The forward curve is the set of prices for delivery months, seasons or years ahead, and it is what suppliers use to price a fixed contract. So when you fix a two-year deal, you are effectively buying against the forward NBP curve for that period, not today’s spot price.
Why timing matters
Because the NBP moves constantly, the day you agree a fixed price affects the rate you lock in. Gas is seasonal, forward prices for winter delivery are usually higher than for summer, and the market reacts quickly to news. There is no way to guarantee the perfect moment, but understanding that your rate tracks a live, moving benchmark explains why the same site can be quoted very different prices weeks apart, and why reviewing the market before you renew is worthwhile rather than defaulting to a rollover.
What it means for your business
You will never trade at the NBP, but it is the engine under your gas price, so it pays to know it exists. The practical takeaways: the wholesale portion of your rate tracks a live market, fixing a contract locks in the forward price for your term, and timing and market conditions genuinely affect the number you are offered. When you review your business gas contract, comparing quotes across a short window, rather than accepting a single rollover rate, is how you make the NBP work for you rather than against you.
Frequently asked questions
What is the National Balancing Point?
The National Balancing Point, or NBP, is the virtual trading hub for wholesale gas in Great Britain. It is where gas is bought and sold once it enters the transmission system, and its price is the benchmark that underpins every business gas contract.
Why is the NBP called virtual?
Because it does not sit at a physical location. Once gas enters the national transmission system it is treated as a single pooled commodity available at the NBP, regardless of which terminal it entered through. The NBP is a market convention, not a pipeline junction.
What unit is NBP gas priced in?
Pence per therm, the traditional wholesale unit for gas in Britain. Your bill charges you in pence per kilowatt hour, and the two are linked by a fixed conversion because one therm equals about 29.31 kilowatt hours.
How do I convert pence per therm to pence per kWh?
Divide the therm price by about 29.31. As an illustration, 80 pence per therm is roughly 2.7 pence per kWh at the wholesale level. Your actual unit rate then adds transportation, policy costs and margin on top.
What is the difference between NBP and TTF?
NBP is the gas trading hub for Great Britain, quoted in pence per therm. TTF, the Title Transfer Facility, is the equivalent hub for continental Europe, quoted in euros per megawatt hour. They are closely linked and tend to move together.
What moves the NBP price?
Supply and demand for gas: weather and heating demand, pipeline and LNG supply, storage levels, the closely linked European market, and demand from gas-fired power generation. These factors can move the price sharply from week to week.
How does the NBP affect my gas bill?
Your supplier buys gas at or around the NBP price, then adds transportation, policy costs, metering and margin to form your unit rate. The NBP is the largest single component, so its movements are the main reason gas prices rise and fall.
Does the NBP change my rate during a fixed contract?
No. On a fixed contract your supplier locks in a wholesale price for the term, so later NBP movements do not change your rate until you renew. On a flexible or pass-through contract, movements can feed through sooner.
What is the difference between day-ahead and forward NBP prices?
The day-ahead price is for gas delivered tomorrow and reflects immediate conditions. The forward curve is the set of prices for months, seasons or years ahead, and it is what suppliers use to price a fixed contract.
Does timing affect the gas price I get?
Yes. Because the NBP moves constantly and gas is seasonal, the day you agree a fixed price affects the rate you lock in. There is no perfect moment, but reviewing the market before you renew tends to beat accepting a default rollover rate.
Can my business trade on the NBP?
Not directly. Trading at the NBP is done by suppliers, shippers and traders. Your business buys gas through a supply contract, whose wholesale element is priced against the NBP. You benefit from understanding it rather than trading on it.
Why are winter gas prices higher?
Gas is seasonal. Heating demand rises in winter, so forward prices for winter delivery are typically higher than for summer. The NBP forward curve reflects this, which is why the delivery period you are buying affects the rate.
Is the NBP the same as the wholesale price?
The NBP price is the wholesale price of gas in Great Britain. When people refer to the wholesale cost in your rate, they usually mean the NBP-based price your supplier paid, before transportation, policy costs and margin are added.
How does gas get to the NBP?
Gas enters the national transmission system through terminals from pipelines and LNG imports. Once in the system it is available at the NBP as a pooled commodity, where shippers and suppliers trade it. Moving it onward is arranged by a gas shipper.
Why do gas quotes differ from week to week?
Because they track the live NBP market, which moves with weather, supply and the European market. The same site can be quoted noticeably different prices weeks apart, which is why comparing across a short window is worthwhile.
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