Following the supply concerns as
we moved through Winter 2005,
wholesale gas and electricity
prices hit record levels forcing a
number of suppliers into
receivership.
Prices fluctuated 50 between
54 per MWh level for most of the
summer but with many gas
infrastructure projects coming
online ahead of schedule and
testing of the new Langeled
pipeline, we have seen positive
signs that for the first time since
2002, savings will be achievable
in 2007.
With many new gas infrastructure
projects coming online over the
winter, including the Langeled
pipeline, this has helped provide
encouraging signs that the historic
supply concerns which helped
inflate wholesale prices are easing.
Already forward wholesale prices
for Winter 07 and Summer 08 are
trading at 44 per MWh (prices
correct as of 7th November), and
if the
extra gas infrastructure
projects come online and are as
successful as
Langeled, we
should see gas and electricity
prices fall further.
Our advice is always about
monitoring every day the wholesale
markets and the forward prices
and this is the same for 2007.
Successfully trialled in 2006 was
our Contract Sign Off option which
allowed us to trade large volumes
of customers and lock in at dips in
the wholesale market. On average,
due to the volumes being traded
and the ability to make instance
decisions, supplier risk premium
was kept to a minimum to
ensure that within day, the
prices were as low as possible.
This ensures that we are
able to lock into the lowest
price base available.
Our strategy for 2007
is to be innovative in our
approach to the market
and continue to ensure
that customers are
provided with as
much information on
market trends as
possible. This
includes the
development of
our various
contract sign off
options in order to
minimise customers exposure
to daily price movements.
