State of the Energy Market – 15th July 2022

Daily Updates

We saw the return of the Sleipner gas field following the repairs to the gas leaks detected. This completed the issues with the Norwegian fields and restored the gas volumes from Norway to the UK and Europe to normal levels.

The market reacted favourably to this news, and we saw a continuous drop to wholesale gas and power prices throughout the day. August 22 gas has fallen by over 15% and Winter 22 gas has fallen by over 8% to now be back below the 400 pence per therm level.

Prompt wholesale prices fell on Thursday due to extra gas volumes coming in from Norway, leaving only the Sleipner gas field offline for unplanned maintenance.

Power

August 22 wholesale power prices dropped by 6.5% to close at £255.50 per MWh.

Gas

August 22 gas dropped by 12.2% to close at £236.82 per therm.

In other energy related news:

  •  The current energy price crisis has led to a surge in demand for rooftop solar installations, which has seen the first 6 months of the year soar to a 7-year high in demand for installations. Domestic customers are facing an additional price hike of potentially 65% when the cap is next due to be changed on 1st Oct 22, which is helping solar panel installations to (pardon the pun) go through the roof. If you’d like to consider solar panels for your business or any other tools to help you reduce your consumption, please speak to your Pulse Account Manager. 
  • The continued lack of nuclear power being generated in France is starting to cause concern for France’s neighbours, including the UK. We can usually expect to import electricity into the UK through our interconnector with France but in recent months, low levels of nuclear power being generated in France has meant that we have had to look at alternatives, including generating power from coal, which happened for the first time in months earlier this week. With the French government renationalising EDF and with EDF being in the driving seat of two huge new nuclear projects in the UK, one underway and the other seeking planning permission, it will be interesting if we end up seeing new Anglo-Franco tension UK over future nuclear project decisions.

  • Following on from the previous article, France’s President Macron has called for citizens to turn off lights at night and to embrace what he calls ‘energy sobriety’ in the run up to what will be a difficult winter. Speaking through public television on Bastille Day, he suggested that the country prepares itself for potential further reductions of natural gas from Russia. He went on to add ‘This war will continue. The Summer and Autumn will be very hard. Russia is using energy like it is using food, as a weapon of war. We should prepare ourselves for the scenario where we have to go without all Russian gas.’ As we reported in a recent article about German energy reduction, it appears that public street lighting will be one of the first areas to see a reduction in use this winter.

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