Summary of last months report:

Throughout February, we have seen reductions in gas and electricity costs across the board with prices for summer 2019 being around the same levels as May 2018. The below graph’s show the wholesale trends of contracts starting summer 2019.

As can be seen from below, the gas wholesale costs have dropped off since October 2018. This has been greatly aided by 16 LNG tankers arriving in the UK during this period and a decline in gas fired generation as wind and solar increase their support to the UK network. Gas is increasingly adding flexibility to the generation mix rather than baseload generation. As the reliance on gas generation drops, this reduces the stress on the gas infrastructure.

Electricity has followed the path created by gas over the last winter. Longer term this linked pattern will shift as the reliance on gas generation reduces.

US production reached record high output 27/02/19. This assisted in pushing down UK costs. However, OPEC have enforced more severe cuts than forecast in order to push prices up. There has been a reduction of 12.1m barrels a day as opposed to the forecast of c10m.
Weak demand has been caused by a less severe and shorter winter than forecast. The small, but reasonably stable, increase in oil costs during February are partly driven by speculation that China and the USA will come to some form of agreement that avoids any serious trade war.

One change we have seen as we move towards the end of winter 18/19, for the first time in well over a year the cost of summer baseload for 2020 rose above the cost of that for 2019.
Forecasted temperatures for March are to be below seasonal norms and wind is not expected to generate at the same levels as over the last few weeks.  These elements would suggest that prices may be rising as we move through March.

Areas of concern:
The main area of concern is the increasingly problematic BREXIT situation.
The continued uncertainty relating to Brexit is a constant concern. We currently operate under an EU instrument called the Internal Energy Market. One key element of this instrument is the security of supply to all Member States. How the UK exits the EU will impact on how the current arrangements and protections are impacted. The main concern would be a “no deal” exit. Whilst it is unthinkable that this would result in supply capacity issues there is a real risk of financial impacts. Ginger has spent a considerable amount time speaking to suppliers and industry experts in relation to this outcome and the general feeling is that, should there be a financial impact caused by a no deal exit this could be up to £25/mWh. It is worth pointing out that these figures are estimates based upon many unknown factors.

From an end users perspective, the appetite for risk is a key factor when making purchasing decisions. This obviously has always been the case but with previously inexperienced risk factors now existing this is a changing landscape. If the appetite for risk is low we would suggest locking in on a fixed contract now and accept the market may change during the period. If unknown risk is acceptable, we would suggest deciding on an “acceptable” cost level, this will be unique to each client, and locking in when that level is achieved.

Despite recent drops in the market the wholesale costs remain high, year on year. This could lead to further drops, especially in the summer months, but with many risk factors remaining live, the market is subject to increased volatility should any of these factors come into play.
Due to the above we would suggest all customers with contracts renewing in Q2, Q3 and Q4 of 2019 contact us to commence their renewals asap. Starting the process does not mean that you have to secure now if you decide not to but you should review the options that are open.

News Stories:

Raising money for Acorns
Ginger’s very own wolf man Rich, is taking part in the Wolf Run on April 13th in aid of Acorns Hospice. This amazing charity, offers a network of care to life limited children and their families. Please support Rich and Acorns by sending a donation to:



‘Carbon dioxide now being captured in first of its kind BECCS pilot’
Drax Power Station is now using C-Capture technology, capturing the first carbon dioxide by using their innovative bio energy carbon capture and storage (BECCS).
This new development moves Britain ahead in the race to develop BECCS technologies, this is an essential part in the fight against climate change. Click here to read the full article.

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 1,000,000 kWhs of electricity they would currently pay £5830 in CCL and from April this will increase to £8470. If your business is involved in the processing or manufacturing of ceramics, metal or glass you may be eligible to pay zero CCL. Call us now to discuss.
Taxable commodity Rate from 1 April 2016 p/kWh Rate from 1 April 2017 p/kWh Rate from 1 April 2018 p/kWh Rate from 1 April 2019 p/kWh 2018 – 2019 Increase p/kwh 2018 – 2019 Increase %
Electricity 0.559 0.568 0.583 0.847 0.264 45.28%
Natural gas 0.195 0.198 0.203 0.339 0.136 67.00%


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 5 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.