Predicting Future Energy Prices – 5th & Final part

Parts 1 to 4 are some of the most important variables but it’s by no means an exhaustive list. Other important factors will all play their part e.g:

• The global economy
• New gas and oil new technology for extracting oil/gas e.g. Steam extraction of Canadian Oil Sands
• Unrest in the Middle East
• Political decisions on nuclear reactors
• The uptake of renewable sources
• New & improving renewable technology

So in summary:

All in all you can see how difficult it is to predict what the energy will do in the coming weeks and months, never mind years! Can Shale Gas reshape the global energy industry as many predict or will it be hindered by environmental, safety and technical issues? What progress will the EMR bring – simplification, stable costs and a clear vision for the future, or the opposite? Will promised storage materialise to stabilise UK prices? …And of course, don’t forget the weather!

Confusing as some of these issues may seem at first glance; these are some of the many factors that need to be taken into consideration when implementing an energy contract. When to ‘lock in’ and how long for are vital questions in terms of costs and budgeting. No-one can state with accuracy exactly what the market will do, however by taking an informed, unbiased view, and with careful monitoring, risks can be reduced and savings maximised.

Team Auditel: the magnificant six ride again

Team Auditel and sponsors at the Auditel Supplier Exhibition 2011

You may remember back in October when we introduced Team Auditel, five intrepid Auditel consultants plus our Recruitment Director, who will be taking part in this years Great British Bike Ride. This gruelling ride will see all six team members cycling the 350 miles from Lands End to Twickenham over 5 days in July and, hopefully, raising at least £5,000 for Auditel’s chosen charity, Help for Heroes.

Ahead of their first team ride in the New Forest Bike Ride (also in aid of Help for Heroes) the team were joined at last Friday’s Auditel Supplier Exhibition at Whittlebury Hall by their eight generous sponsors for a chance to model their new kit and to drum up support and donations from colleagues. With an average of 70 miles to cover on each day of the ride, training started in October last year and the team have already covered thousands of miles, so we all wish them the very best of luck in these last few intensive weeks of preparation.

If you’d like to support Team Auditel and help them to reach their fundraising target you can visit their Just Giving website. Alternatively, I’m sure all the riders taking part in this arduous and challenging event would welcome support along the way so, if you’d like to give them a cheer, you can see a route map and details of each stage here.

Predicting Future Energy Prices – Part 4

Electricity Market Reform

The UK government has embarked on a road to electric market reform to achieve the Government’s objectives on decarbonisation, renewables, security of supply and affordability.

Industry experts have called for simplification of the market, the need for increased storage facilities and more concrete plans on how the UK’s base load supply will be provided in a low carbon economy – for many nuclear is the only non-carbon option for this role. Added to this some analysts predict power shortages from around 2015 as old power stations are taken offline before replacement sources are ready.

The consultation on the EMR finished in March and a White Paper giving legislative proposals to implement the new electricity market arrangements will be published in July with implementation beginning some time in 2012.

Current predictions estimate that it will cost £200 billion over the next 10 years to meet the UK’s energy demand and meet current carbon-reduction objectives.

The EMR should tackle some of the burning issues (no pun intended!) and hopefully resolve some important questions. Either way, it’s likely that the decisions made will have a major impact on the UK energy market for some time to come.

Predicting Future Energy Prices – Part 3

2010 saw the emergence of a potential future abundant supply of natural gas, which could potentially stabilise and suppress gas prices for years to come.

Shale gas – also known as ‘unconventional’ gas –has always been known to exist in rocks deep below the Earth but it’s only in recent years that the technology has emerged to extract it in a safe and cost effective way. However, this is a viewpoint disputed by some, particularly in the environmental sector, as the safety and environmental impact of Shale gas is questionable. Recent events have raised a few eyebrows – such as the blowout in Pennsylvania that shot a 23-metre combustible gusher of gas and toxic waste water into the air added to reports of natural gas coming through household taps in towns nearby! http://youtu.be/d6G6Ap-mF0k Also, a recent report by the Democrat party in the States suggested that more than 650 of the chemicals used in shale gas fracking were carcinogens.

However, many analysts are optimistic. The US is now beginning to adapt to recently built LNG (Liquefied Natural Gas) import terminals into export terminals (completion expected in 2015), with hopes of future LNG exports in mind.  Although the emergence of shale gas began in America, the required geology and resources are worldwide and the scope for energy provision is huge. As Nick Grealy of consultancy ‘No Hot Air’ advises:

“This could be the best news for energy since the North Sea discoveries. Ignore shale at your peril.”

Predicting Future Energy Prices – Part 2

Gas Storage

Gas storage is very important to market stability as it allows surplus reserves to be released to the market in times of dwindling supply. However, the UK has very low storage levels (when compared to anywhere else that matters ‘energy-wise’).

The US and Europe (as a whole) have storage levels of 15-20%, while the UK’s is around 6%. Hence UK price is much more influenced by supply fluctuations. This is why, for example, recent technical issues in Norwegian gas fields and pipes have caused spikes in the UK’s energy market.

Some small storage increases are planned to be in place by the end of this year with further, much larger increases in 2015. The planned increases should help to stabilise prices in the UK. Although conversely, some experts predict that the closing gap between summer and winter energy prices will make increasing storage a less cost effective option and is increasingly likely to be dropped altogether. Inaction could be very costly as it’s predicted that unless UK gas storage grows considerably in next few years; prices could increase by up to 40% by 2015.

Predicting Future Energy Prices – Part 1

Agreeing an energy contract can be a tricky business. There are many different parts to an energy contract, but price per kWh is the one most people look at.

To agree a good price there are 2 seemingly simple questions – ‘when should I lock in and how long for?’ The ability to predict exactly what the energy market will do in the coming weeks and years just isn’t possible but by looking at the fundamentals that drive the market it is possible to agree contracts with an informed viewpoint and some degree of confidence. With this in mind Phil Bennett recently attended The Energy Show – an annual event at The National Motorcycle Museum in Birmingham dedicated to energy purchasing, metering and onsite generation. The below is his review of the event.

The event had some great speakers who offered a variety of view points on what was going to happen in the coming months and years. They discussed a multitude of factors that need to be considered when predicting the future of the energy market – factors that differ depending on whether you’re looking at the short, medium or long term view. Below I’ve given a quick overview of the main points I took from the event; some of the most important variables impacting UK energy prices today and into the future.

Read more…

A Dynamic Approach to Managing the Cost of Doing Business

Auditel Host 11th Supplier Conference and Exhibition, Whittlebury Hall, Northants

On Friday, 13 May 2011, Auditel, the UK’s largest independent cost and purchase management consultancy, will be hosting their 11th Supplier Conference and Exhibition at Whittlebury Hall near Towcester, Northants. Auditel recognises the importance of proper relationships with the right type of suppliers and partner companies for the exhibition include; EDF Energy, British Gas, Shell LPG, Travelex, Bluefin Insurance Services, Accept Cards, UK Telco, Scottish and Southern Energy and NatWest Mentor.

Established in 1994, Auditel is currently saving millions of pounds for over 3,300 organisations nationwide through their unique Total Cost of Purchase® model. Their services now cover the full spectrum of business expenditure, supported by strong, but independent, supplier relationships and the wide-ranging, top-level experience of over 190 cost and purchase management specialists.

Auditel’s Managing Director, Chris Allison, says: “For over a decade, we have provided this forum for suppliers of products and services to our clients, giving them the chance to meet our Consultants, exchange ideas and explore new opportunities to service our ever-increasing client base. This year, it will be even an even bigger and better event than before. Thirty five market leaders will be presenting their unique offerings to our largest ever gathering of cost and purchase management specialists under one roof.”

“This year, the theme will be ‘A Dynamic Approach to Managing the Cost of Doing Business’. Together with our partners we will demonstrate how businesses can take advantage of the current economic climate, to prepare for better times ahead, emerging stronger than before.”

Focus DIY is going into administration

It is a shame, but they have been struggling for a long time, and the current state of the housing market didn’t help. This reminds us that if you are going to be in an inconvenient location, you’d better be the category killer (or the best player, with the biggest pulling power!)

Yesterday (May 5th), this news was widely reported as you will now know. My interest in Focus is multi faceted. I sometimes say that I was born retailing. My parents had three hardware and Garden shops in Nottingham when I was young. That is where my career started. The bigger “DIY sheds” (B & Q, Great Mills etc), were just emerging. Remember Texas “THE BIG ONE”? Sadly I do!

They were putting pressure on the traditional independent retailers like ours. The supermarkets were doing the same, although initially just on food, not DIY and Gardening. Now of course they do Stationery, Greetings Cards, Decorating, Motorcare, Toiletries, Cleaning, Dry Cleaning, Post Offices, Key Cutting, Shoe Repairs, and even Cars!

Read more…

Blow wind, blow over Blighty and its modern windmills!

According to Renewable UK, latest statistics reveal that in 2010, the contribution of wind to the UK’s electricity supply was almost 3 times that of hydro, totaling over 10 terawatt hours. This is sufficient electricity for well over 2 million homes.

As for Quarter 4 2010, all indicators point to the fact that wind delivered a record contribution of electricity to the grid, both 20% higher than Q3 2010 and 24% higher than the comparable Quarter of 2009. So much for those who say that wind energy production falls off in the winter months!

Today, in and around the UK, there are almost 3200 turbines in operation across 290 projects. Apart from the energy produced, our atmosphere benefits too. Annual noxious gas reductions amount to 6MT of carbon dioxide, 137kT of sulphur oxides and 41kT of nitrogen oxides.

Read more…

A word in Urea

Researchers at Heriot-Watt University in Edinburgh – renowned for its leadership on critical global issues – have discovered a way to use urea – (NH2)2CO – as a fuel for low-cost fuel cells. Fuel cells are an excellent form of alternative energy for, amongst others, cars, submarines and remote power stations, but concerns over the cost of hydrogen and its explosive nature have prevented the technology from being widely used.

Using urea — which is present in all animal and human urine — instead of hydrogen could be a low cost alternative to these super low-emission systems. Urea is a rich source of nitrogen and its removal at sewage plants is both energy-intensive and expensive.

Removing urea directly from urine offers a possible alternative for producing both clean water and electricity.

(Source: Inhabitat)