Headlines:
- Gas and Electricity Wholesale prices have moved higher over the last week
- EU Gas Storage levels are an improved 88% full.
- Nord Stream 1 and 2 Gas pipelines have been damaged
Since our last Energy Report, Gas and Electricity Wholesale prices are higher.
On the 21st of September the government confirmed support for non-residential customers through the Energy Bill Relief Scheme. This will provide assistance for businesses facing high energy prices this winter. A review after three months will determine if it should be extended for targeted industries.
Businesses that contracted Fixed rate deals from 1st April 2022, will have the Wholesale element of their bill reduced to an expected level of 21.1 p/kWh for Electricity and 7.5 p/kWh for Gas. It does need to be stressed, that this is just the Wholesale element and excludes a range of other charges which need to be included, such as transmission and distribution. For those that are not in a contract, the support sees a reduction of the Wholesale element at the expected Maximum Discount level of 40.5 p/kWh for Electricity and 11.5 p/kWh for Gas. This does mean that by not contracting there is the potential for a higher charge than those that are contracted.
Although energy markets showed little reaction to this news, the damage sustained to Nord Stream 1 and 2, from what appears to be sabotage, has created upward price movement, despite neither being in operation. There is also a concern that Russia may stop Gas flows through Ukraine, due to a payments dispute.
The continued closure of a large number of French Nuclear reactors, is one more reason for concern this winter.
Gas and Electricity prices remain extremely volatile. The disruption of Gas flows or at least the threat, appears to be a deliberate manipulation of the energy markets to inflate costs and cause damage to economies. Due to this instability, we would advise looking at your options for contracts into 2023 and having conversations with your contact at Indigo Swan about your specific requirements.
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