Weather Conditions
January-21 to February-21
January 21 was the coldest the UK has seen in 10 years, with power and gas prices rising significantly. Q1 had depleted the UK’s gas storage which kept prices strong throughout the year as the UK never replenish the storage.
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TCR Methodology
Under the TCR changes the DUoS and TNUoS will be charging a fixed daily and standing charges based on a new voltage-based banding system which is being introduced. Due to losses through the covid period the standing charge will change from variable to fixed.
Suez Canal incident
March-21
The recent closing of the Suez Canal owing to a stuck ship caused catastrophic losses and LNG tanker delays on route to Europe creating further price inflation. Aramco based in Saudi Arabia is one of the largest oil producers in the world. They have built a risk premium into their price following an attack on their sites from militia groups which has been felt globally.
Renewable Heat Incentive (RHI)
March-21
Incentive schemes (domestic and non-domestic) for the generation of heat from renewable and low carbon sources.
The Renewable Heat Incentive has two schemes - Domestic and Non-Domestic. They have separate tariffs, joining conditions, rules and application processes. The Non-Domestic Renewable Heat Incentive Scheme (NDRHI) in Great Britain closed to new applicants on 31 March 2021.
UK ETS Carbon Scheme & Oil
May-21
EU carbon’s price has been soaring once again hitting new highs of €56/tonne due to sterner energy targets to achieve net zero and reduced credits available in the market. The 19th May we saw a small drop in the price of carbon due to the UK introducing its own trading scheme however this was short lived, and prices increased back to high levels. Colonial the operator of the biggest fuel pipeline in the US closed for five days due to a Cyber-attack causing chaos on the East Coast.
Lockdowns eased
June-21
Lockdowns were eased which had a negative effect on the power and gas markets due to demand increases. Power prices increased from £81 MWh to £98 within the Month.
Gas Storage & LNG
July-21
The UK remains in a vulnerable position for the upcoming winter period as storage levels remain well below average, for this time of year. LNG cargoes continue to be diverted elsewhere. UK storage levels is sitting at 33%. Russia kept flows through Nord Stream 1 via Ukraine to EU very low not contributing any surplus of gas through the network.
Nord Stream 2 glitch
August-21
Near term gas prices drop suddenly by cica 10% before recovering 2 hours later. It transpired that this was a data glitch on the new Nordstream2 gas pipeline from Russia into Western Europe which reported gas flowing whereas it wasn’t.
Fire at IFA1 interconnector
September-21
An incident on the IFA1 interconnector has combined with continued bullish sentiment in the forthcoming front season to surge prices in the UK Power market. Winter prices hit £204 MWh along with Summer 22 prices reaching £92 MWh.