The International Energy Agency (IEA) launched a 10-point plan to remove reliance on Russian gas and reduce the European Union’s Reliance on Russian Natural Gas. While this is not new or ground-breaking in the plan, it’s good to see that they are on the same wavelength as the UK government and the EU with their thought process.
Boris Johnson has continued to hint that the UK government’s long awaited energy security plan, which has been delayed for several weeks is now expected to be revealed next week, will include a big emphasis on increasing the current targets set for offshore wind generation. The goals are likely to now also include floating wind turbines. The current target of increasing the present levels by a factor of four are already expected to come at a considerable cost to bill payers, as many of these significant
infrastructure changes can end up being passed through to end users and so, it will be interesting to see if there is a well thought-through plan as to how the targets will increase without further costs being passed down the line to customers.
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Wholesale gas prices were on the increase yesterday, April 22 closed at 249.78 pence per therm, up
3.6% on Wednesday’s closing price. This morning, gas prices opened up slightly on yesterday’s close but as has been the theme in the last week or so, prices have drifted down within day and we expect to see a closing price below yesterday’s close for April 22 today.
Wholesale power prices were also up 3% yesterday with April 22 closing at £226.08 per MWh. This morning has seen a quiet start for power but the expectation is that power will follow gas within
day with prices expected to close below where we ended yesterday.
In other energy related news:
- France’s President Emmanuel Macron has suggested that a re-nationalisation of some EdF (the former state owned electricity supplier) assets might be on the cards to help his plans to bolster the country’s energy independence. This is likely to form part of his manifesto for re-election.
- Ofgem is ramping up the scrutiny it places when considering whether they should issue energy supply licenses to new applicants. In the last 12 months, almost 30 energy suppliers have gone to the wall with the majority of these, leaving their customers facing considerable increased costs. Through a process called mutualisation, it has also left the suppliers that have not gone bust to swallow those costs, which eventually are again passed through to all bill payers. This new, more rigorous approach should help to minimise the amount of suppliers that end up failing.
- The UK government is allegedly considering building a solar power generating plant in space. Yes, you read that right. At an estimated cost of £16 billion, many observers believe that this sort of investment would be better utilised on developing renewable supplies on terra firm, either by increasing offshore wind farms, by developing more nuclear, developing battery storage at industrial levels or perhaps on really getting behind fusion energy. If we get fusion right, that really would be a game changer.
- Rishi Sunak is believed to have confided with his inner circle that the estimated cost to the UK of immediately cancelling all energy deals with Russia, would come in at a staggering £70 billion. This explains why sanctions against Russian gas in particularly are yet to be seen from the UK and the EU.