Since our last Energy Report, Gas and Electricity Wholesale prices are lower.
Yearly Wholesale prices starting in 2023 and 2024 remain high when compared to 2021, but there has been a significant reduction in the last month. Prices for 2025 are showing better value. The government has announced that the Energy Bills Discount Scheme will replace the current, Energy Bill Relief Scheme, from 1st April 2023. At present, a generous discount is applied to contracts and deemed rates, whereas the new scheme will provide a modest discount when Wholesale prices pass a threshold. This will last for 12 months. Please see our Blog for more details.
Despite the recent cold spell and increased demand for Gas and Electricity, the trend for Wholesale prices continues to be downward. Wind has contributed a very high 40% of supplies so far in January, although it has fallen in recent days. With Gas providing just 19% of Electricity generation, compared to 37% in December, this has helped offset the increase from heating demand. Gas Storage levels in the UK remain high as do those in the EU, which are currently 81% full, far healthier than had been feared. Large numbers of LNG shipments continue to be delivered, with more due when the US Freeport LNG terminal comes back online, possibly by the end of the month.
The National Grid has measures in place to react to any Electricity supply shortages, and with a much more positive outlook for French Nuclear generation, this is allowing us to import via the interconnectors.
Although prices are lower, there continues to be some volatility, which may be exaggerated should there be another significant global event. For this reason, we would advise looking at your options for contracts ending in 2023 and having conversations with Indigo Swan about your specific requirements.
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