Utilities Insider Issue 1

Issue 1 – 24th June 2011

Welcome to the first ever edition of the Utilities Insider! – Every two months we’ll keep you up to date with the utilities markets, including important news on industry developments, changes in regulation, and changes in price. As this is the first edition, we have included news and updates from the whole year to date:

Wholesale oil and gas prices have increased

Back in April we reported that oil hit a two-and-a-half year high on the wholesale market, when it traded at $120 a barrel. This was due to a combination of factors including the earthquake and subsequent nuclear scare in Japan, the conflicts in the middle-east, and increased demand from emerging economies such as China and India. [Full Story]

Suppliers have started to raise prices

Centrica, owner of British Gas issued a statement near the start of May warning that because forward gas prices were 25% higher than the previous year, prices in the coming winter were likely to reflect this. Scottish & Southern Energy and ScottishPower then made similar announcements in the following weeks, and we expect more suppliers to follow suit in the coming months. Ofgem’s latest Supply Market report shows the difference between 2010 and 2011 forward gas prices:

This strongly indicates that prices will continue to rise until the end of the year and possibly well into 2012. If any of your business contracts are up for renewal soon, make sure you secure your energy now and protect your business from any damaging price hikes. [Read Energy Prices News]

Ofgem market review in full swing

November 2010 saw Ofgem announced a review which aims to assess the overall effectiveness of the retail energy markets. It raised concerns over complex pricing and lack of transparency. Ofgem said suppliers were “making too much profit” and also expressed concerns about the dominance of the big six on the market, and aims to increase competition and make it easier for new suppliers to make headway in the business sector. [Full Story]

Nuclear power under scrutiny

Although the 40-year-old Fukushima Nuclear Reactor seemed to cope relatively well considering the strain put upon it, the energy secretary Chris Huhne decided at the start of April to delay the approval of the new plants EDF Energy is planning to build in the UK, so that any lessons learned from Japan could be fully considered. Since then new EU stress tests for nuclear plants have been finalised, and Germany has announced that it is phasing out all nuclear plants by 2022. [Read Nuclear Power News]

Wind farm inefficiency exposed

A study has shown that wind farms’ output is even lower than most people anticipated. It was previously thought that wind farms ran at about 30% capacity, but the study suggested that it is more like 20%. In addition to the low output, it was found that wind farms output the least energy when demand is highest, leading the author of the report to believe that they “cannot be relied upon” for energy security. [Read Wind Power News]

We hope you found the first edition of Utilities Insider useful. If you have any queries, get in touch with us and one of the team will do their best to help you. Call us on 0845 33 75 997 or just visit the website at http://utilitiessavings.co.uk and submit an enquiry.

Kind Regards,

Utilities Savings

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