We have seen 2017 start in a volatile fashion on the UK energy markets with prices following a pattern of downward movement in early January but this was then reversed mid-January mainly for near months February & March as exceptionally cold weather hit eastern Europe and started heading westwards stroking gas and power supply fears once more not helped by two nuclear plants which went offline and wind output dropped in the UK, however mid and longer term prices have not been affected as they mirrored the gas market which has shown lower prices longer term.
As we moved into this week we have seen short term prices also ease on the back of lower oil prices as the recent OPEC production cut has been offset by US increased drilling leaving once again an excess of oil along with reports of milder weather in the next week and for February helping provide confidence in supply to cover demand, when we secured February rates prices traded down to 52.15Mwh which is the lowest rate secured for this winter 16/17 and the lowest point it has traded in 2017. It should also be noted we have now seen the return of the last two (of nine) French Nuclear power plants return on line and with us now edging out of the winter months left to secure we are less open to the weather.
How could Brexit impact your costs?
Prime Minster Theresa May signaled a so called hard Brexit this month but has not yet given any indication of what that may mean for the UK energy sector.
With around 9% of UK energy currently coming from European imports it is likely to mean an increase of price of energy imports. A number of new power inks are planned in the next decade, which are intended to replace closing fossil fuel generation sites with cheaper electricity from the continent.
National Grid have said that the each 1GW of new electricity interconnector capacity could reduce Britain’s wholesale electricity price by up to 2%, however for interconnectors to be economically viable, they must able to sell capacity to traders and therefore require an efficient and robust trading agreements in place between various countries. At present Britain currently has tariff free electricity trading with Europe and National Grid have suggested that leaving could make trading more difficult.
It should be noted at this time that longer term prices for both electricity and gas are trading at some very good levels and we believe it very prudent to now look at ensuring non commodity agreements are in place to protect these increasing costs and also take advantage of longer term prices with a tailor made commodity purchasing plan. If you would like to get more information on this, please contact your account manager or reply to this email and I will forward onto your account manager.
On Site Generation – the future to lower costs?
Now doubt you would of heard of various technologies over the last 12 months that are progressing in the UK to aid future energy generation which is better for the environment and also reduce your usage and costs, we at the Energy Network are very excited about this area and believe the possibilities it can bring for your business, if you would like to know more on this please view our blog and see what we are saying about on site generation an energy saving ideas.
Bogus Callers!
As you may re-call in last month’s tracker report we mentioned an increase of bogus callers to customers , we have received further information that fraudsters have been calling business pretending to be from Ofgem and claiming your supplier has been suspended from trading for a period of time and that they require your bank details to provide a refund!
With an increase of calls to this nature it is prudent to be on your guard to these calls and if unsure of any telephone communication in regards to your energy accounts or meters , please feel free to direct any callers to us and we are happy to review the information before coming back to you.