Since our last Energy Report, Gas and Electricity Wholesale prices are lower.
2022 costs are still very high but showing better value in 2023 and 2024, which does provide an opportunity to contract longer and reduce the shorter term % increases.
On Monday, Gas and Electricity Year Ahead Wholesale costs fell to a 3-month low, as fears that Russia would cut Gas supplies to countries, were not realised. Finland did have supplies suspended due to their refusal to pay in roubles, but the impact is minimal due to their very low Gas use. However, there is still a considerable concern built into current costs, that further action could be taken, as was demonstrated with a slight rebound of prices on Tuesday.
The events in Ukraine, and the international response against Russia, continue to dominate the headlines. The EU has outlined plans to stop importing Russian energy by 2030. This involves putting infrastructure in place to import supplies via pipelines and by increasing LNG capacity, as well as a focus on energy efficiency and awareness. EU Gas Storage levels continue to improve towards their 80% target by November, currently at 44% compared to 35% last year and 70% in 2020.
Electricity prices will follow Gas due to it being our main source of generation, at a high 48% so far in May.
We would advise looking at your options for contracts ending in Q3 and monitoring the remainder of 2022, having conversations with your contact at Indigo Swan about your specific requirements.
