Summary of last months report:
It was a mixed picture in November.
The gas price dropped slightly (c3.5%) during the month. This was driven by larger than expected volumes of LNG shipments hitting the UK market, unseasonably high temperatures and good supply from the UK and Norwegian fields.
Oil also saw drops during November, as you can see from below the drop was sharp and takes us back to the start of 2018 in terms of cost. This was driven by concerns of over supply in the market as amendments to sanctions involving Iran have allowed 8 countries to continue to trade with Iran.
- Unfortunately the electricity market did not follow the same trend. Power prices for contracts in January 2019 saw slight increases around 1% whilst prices for summer 2019 at the end of the month mirrored the price at the start of the month despite a lot of movement in month.
- Overall trader confidence has been improved tension easing between the US and China in a bid to avoid international trade wars. However Brexit and its fallout is still causing significant concern in all markets.
December Energy Price Outlook
Areas of concern:
The big unknown factor is the impact the weather will have on the supply industry as we have experienced highs and lows over the last months. A harsh winter or a sudden supply interruption are the unpredictable elephants in the room.
Despite recent drops in the market the wholesale cost remain very high. The market could see further drops but with many risk factors remaining live the market is subject to increased volatility should any of these factors come into play. A major factor will be the weather during winter months and as has been seen in the last few years this is very difficult to predict.
Due to the above we would suggest all customers with contracts renewing in Q1 or Q2 of 2019 contact us to commence their renewals asap. Starting the process does not mean you have to secure now if you decide not to but you should review the option.
December News Stories:
Ginger on Sky TV:
Ginger has recently be involved in filming alongside our partners, EO Consulting and Barker Associates, a documentary explaining how managing and using energy data in the public sector can be used to drive efficiency to higher levels of success. Watch this space for the airing date!
Breaking wind records:
The strong winds have helped the UK set an incredible new renewable energy generation record last week. Click here to find out more on this news story.
CRC and CCL:
With the Carbon Reduction Commitment (CRC) scheme being abolished in 2019 there are severe increases in Climate Change Levy (CCL) being introduced in April 2019. Whilst CRC only applied to large users CCL applies to the vast majority of users regardless of consumption levels. The increases can be seen below.
Should a business use 100,000 kWhs of electricity they would currently pay £5830 in CCL and from April this will increase to £8470. If your business is currently involved in the processing or manufacturing of ceramics, metal or glass you may me eligible to pay zero CCL. Call us now to discuss.
ESOS PHASE 2:
If your business (at group level) employs more than 250 staff or has an annual turnover greater than £38.9m with a balance sheet in excess of £33.5m you must partake in The Energy Savings Opportunity Scheme (ESOS).
ESOS requires the organisation to measure its total energy consumption, including buildings and vehicular, conduct energy audits to identify energy saving opportunities and report compliance to the Environment Agency.
Non-compliances can incur a variety of penalties from the EA. These can be upto a £50,000 fixed penalty plus £500 per day.
Compliance with the second phase of the scheme must be completed and reported to the EA by 5th December 2019.
Ginger Energy does not complete or manage the ESOS obligations for clients but we do provide large amounts of the required data and can recommend trusted partners to manage the ESOS process.