Energy price summary
It has been an interesting few months with a consistent decline in energy prices. This has been driven mainly by weak commodity markets, healthy levels of supply and supported more recently by a strengthened pound.
Globally the ongoing spat between the US and China has dominated the direction of oil prices. The declining use of coal for energy generation has seen the demise of the coal price — though this will reach a level where it will be increasingly attractive to use for marginal needs (currently we would use gas).
The price of Carbon has also fallen recently, however this looks like it is only a dip relative to an overall increasing trend. However, if we have a no-deal Brexit and exit the European Carbon Trading Scheme, we will see carbon costs fall in the short term.
Cost of supplier failures to the consumer
Energy consumers will be forced to foot a £172m bill to cover the cost of the collapse of 11 energy suppliers since the start of last year.
EDF Energy’s ‘Power Now’
You may recall EDF presenting their energy monitoring package. We will have a chance to investigate its potential shortly as The Royal institution of Great Britain are giving the tool a go. Watch this space.
Despite the relative lack of development of this market, it is generating a huge amount of interest as businesses try to steal the early lead in technologies and services.
It is a fascinating time in the market with some major announcements impacting some of the larger and more popular suppliers.
- Orsted – The Danish owned company have dropped out everything but the very largest end of the market. They will only deal with customers with > 30 GWh. And though they will honour current contracts, there is expected to be a bun fight for their business amongst other suppliers as they have an attractive portfolio of large customers.
- Bristol Energy – Have further retrenched their activities by dropping out of the Third Party Channel and are focussing only on existing and Bristol based direct opportunities.
- SSE – Scottish energy giant SSE have reaffirmed its plans to exit the domestic market by
- British Gas – Ian Conn of Centrica left when he could no longer sustain his position after the loss of 2.5 million customers. Conn set out a strategy focussing on retail and moving away from generation and technical assets — a strategy that failed. It may have worked if the emphasis was centred more on the customer, and less on British Gas.
- Solarplicity – After several winding up petitions, challenger energy supplier Solarplicity, the majority of Solarplicity’s customers were acquired by fellow challenger supplier Toto Energy. Brighton-based Toto also said it will become the preferred grid energy provider of Solarplicity’s community energy scheme.
Article by: Chris Barrett
This is an article from: Insight & Innovation: Issue 3 – click here to read the whole newsletter.