Since our last Energy Report, Gas and Electricity Wholesale prices are higher.
Costs for the remainder of 2022 and the first quarter of 2023 remain high. Although 2023 and 2024 show better value, there is still a premium, but does provide an opportunity to contract longer and reduce the shorter term % increases. The government’s Energy Bill Relief Scheme continues to provide a capped Wholesale cost for those that contracted from December 2021 and a discount for those not contracted. This started in October 2022 and runs until March 2023, and maybe extended for specific industries. Customers still need to monitor the markets for contracts from April 2023, when they may once again be fully exposed to costs.
There is a more positive outlook for Gas supplies across Europe with EU Storage levels at 94% full, just slightly lower than last week but well above their 85% target. The UK continues to inject Gas into Rough Storage for use if required this winter, although our capacity is still far lower than the likes of France, Germany and Italy. The US Freeport LNG terminal looks to resume shipments mid-December, brought forward from early 2023. Germany will shortly open its first LNG facility to receive deliveries, with more to follow in 2023.
Wind generation was down on Monday and forecast lower this week, which is adding some pressure to both Gas and Electricity supplies. France continues to struggle to bring more Nuclear reactors back online. The UK would normally look to the continent for additional Electricity imports during peak periods, but their generation concerns mean we need to pay for Coal plants to be on standby and for consumers to reduce demand.
Wholesale prices remain extremely volatile with a great deal of uncertainty. Therefore, we would advise looking at your options for contracts ending in 2023, having conversations with Indigo Swan about your specific requirements.
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