Archive for November, 2015

The Government’s ‘reset’ of energy policy this week spelt good news for the builders of gas-fired and nuclear power stations, along with shale gas producers, but not such good news for renewable generation or coal, with all coal-fired power stations closed by 2025.

The already-announced reduction in subsidies for photo-voltaic and onshore wind power were accompanied by a warning to the offshore wind industry to lower costs or also see the end of subsidies. The French and Chinese operators of the planned new nuclear plants, on the other hand, will benefit from a guaranteed £92.50 p/MWH when they come on stream, more than double the current wholesale market price (£39 p/MWH).

Although the importance of energy efficiency was highlighted, there were disappointingly no new measures to support businesses and consumers in implementing efficiency measures, which is surely easier than building more stations.

 

 

 

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The prospect of a winter blackout came nearer this month as the National Grid had to ask the generators for more power due to breakdowns at a number of power stations.

The worry is that the UK’s balance between supply and demand is now so tight that if a breakdown on a warm autumn day causes the National Grid to issue a Notification of Insufficient Margin, what will happen if we have a particularly cold spell and further breakdowns?

News like this is normally enough to send energy prices surging, and although the response was muted this time, it’s possible that repeated supply warnings  (or even a short blackout) could cause prices to spike.

Businesses are enjoying some of the lowest energy prices for many years however this trend must come to an end sometime, and it could be that further supply warnings are the turning point for wholesale markets, bringing to end a period of benign energy prices.

Where possible it is advisable to quickly secure a long, fixed contract now to minimise any risk of increased energy costs, so do get in touch.

 

Initial results from a survey of company directors by The Energyst show that around two-thirds think that electricity prices will increase by around 10% next year.

The expected increase comes after a year of softening wholesale energy prices on the back of the low price of oil.

With most industry commentators anticipating price rises next year it’s a good time to be reviewing any contracts coming up for renewal during 2016. Even if your renewals aren’t until next August/September savings could be locked in now, so do get in touch.