Chancellor Jeremy Hunt has outlined plans to increase existing windfall taxes on oil and gas companies from 25% to 35% and extended the scheme until March 2028. A 45% tax will also apply to “low carbon electricity generators”, including wind, solar and nuclear.
An increase in liquified natural gas (LNG) imports and a new German floating LNG terminal is helping to ease pressure on UK gas prices. The LNG terminal is the first of several planned to replace the gas supplied by Russia which was stopped during the Ukraine invasion.
Europe’s gas storage has improved significantly to 94.25% which is 21% fuller than this time last year. This will help to ease demand pressures and pricing for the EU and UK.
Rolls-Royce has urged the UK government to enter formal negotiations over the funding of small ‘baseload’ nuclear power stations which would provide a reliable source of power when weather-dependent renewables aren’t producing any. Rolls-Royce is leading a consortium that has designed a 470-megawatt small modular nuclear reactor which could produce enough power for a city the size of Leeds and improve the UK’s energy security.
Polish regulator (UOKiK) has launched an appeal for the Nord Stream 2 fines against Russia’s Gazprom and five other companies because it was built without the consent of the Polish Government. Poland was a staunch opponent of the Nord Stream 2 project because it feared Russia could use energy supplies to exert influence over European countries.
Qatar has agreed to a historic $60bn deal to supply China with 4 million tonnes of LNG every year for the next 27 years, thought to be the longest LNG agreement on record.
Electricity and Gas Prices
Although forward prices have increased overall, Quarter 1 is showing positive short-term decreases in both gas and electricity.
News of cold weather approaching in December which will push up demand has caused short-term electricity and gas prices to trade at a premium, with day-ahead prices trading in line with current spot prices.
The weather will continue to play a large part in energy pricing over the next few weeks as it affects gas storage to a greater or lesser degree in the UK and EU.
Flexible Purchasing - EPEX Price
Our flexible purchasing customers are buying on EPEX, a European auction for power. Because they auction every hour of each day, customers get the “market average” price as opposed to a fixed-term contract over eg a 12-month period. Being on this product means that you will pay the average of each day for the month and once the market falls the price will follow.
The EPEX electricity price on 29/11/22 is 14.22 p/kWh (commodity). With the non-commodity added to this, the overall rate will be 27 p/kWh+.
Carbon prices have been stable throughout October with prices hovering around the high €70s, with the 10th seeing the lowest price of €70. The last couple of days have been uncertain and stayed near the €78 mark.
Carbon prices have increased following recent gas price increases (forward curve) and the UK turning to coal power stations.
Oil prices have decreased by over 15% throughout November to lows of around $81 per barrel, not seen since early January.
This is mainly because of a reduction in global demand, especially in China which is seeing a spike in Coronavirus cases again.
For help and advice with your business energy contact our team.
0114 327 2645