State of the Energy Market – 1st April 2022

Daily Updates

Wholesale prices for May 22 gas and power opened on Friday (1st April) approximately 4% up against the previous night’s close driven by concern over Russia potentially turning off the gas taps to Europe if the G7 countries continued to refuse to pay Russia in roubles. Germany reiterated their previously communicated message that they would be adhering to the terms of their existing contract with Russia, which was to pay for the gas they received from Russia in euros and they had no intention to change mid contract to roubles.

Later in the morning, a Kremlin spokesperson announced that Russia would not be turning off the gas taps to Europe and that rouble payments will affect settlements due in late April and May as opposed to now. This was supported by an increase in the gas coming through the Russian pipeline that transports gas through Ukraine. It helped to settle market nerves with prices for May 22 trading in the afternoon at 2.5% down for electricity and 6.7% down for gas. Unfortunately, rather than resolving the issue, this appears to have kicked the can down the road, with the opposing views on whether future payments will be in roubles, euros or dollars set to come to a head in the next few weeks.


Wholesale gas prices for May 22 closed at 299.32 pence per therm on Thursday (31st March). This was a 4.4% increase on the previous day’s close. This increase was caused by the extra gas demand due to the colder temperatures that we’ve seen across the UK and which are set to continue for at least the next few days. Also, increases were supported by President Putin’s new decree insisting that unfriendly countries should pay for Russian gas in roubles from 1st April.


Wholesale power prices for May 22 also increased on Thursday (31st March), closing at £249.72 per MWh, which was a 2.8% increase against the previous day.

In other energy related news:

  • The final 2 LNG cargoes that we were expecting for UK delivery during March, failed to materialise and so we ended the month with a total of 23 LNG cargoes delivered during March.  A healthy 14 cargoes (mainly from the US) are expected by 16th April.
  • For anyone interested in Bitcoin, one of the drawbacks to investing in crypto currencies is the dependence that mining for coins has on energy. It is estimated that the combined total electricity used globally for mining crypto currencies equates to the total electricity usage of Sweden. By moving to an alternative proof of stake mechanism, which is already in place for Ethereum, energy consumption can be reduced by as much as 99%, which could bring back to crypto markets users that had previously been put off by this issue.
  • As we wait for the delayed energy report from the UK government, leaks suggest that nuclear and offshore wind farms are likely to feature heavily. Smaller scale nuclear facilities are likely to be included, which will mean that new facilities can bring low carbon energy to the grid much faster than building larger facilities like Hinkley C, which as we reported previously, is experiencing further delays.
  • Tesco have reached their milestone of installing 500 free EV charging points at their stores for customer use across the UK.
  • In what could be one of the largest electricity transmission projects that the UK has seen in many years, Ofgem has identified that there is a ‘clear case’ for development of two subsea links which will transport electricity from Scotland to England, one from Torness to Durham and the other from Peterhead to North Yorkshire. The total capacity for both links will be 4GW, which would be enough to power 4 million homes.
  • Friday was the first day of the increase in the price cap for domestic customers on variable rates, however it has been estimated that the next price cap change from 1st October 22 will see a further increase of between £500 to £800 for average users, which will push even more customers into fuel poverty. 
  • Hundreds of environmental protesters from the group Just Stop Oil have created blockades around London, Birmingham and Southampton oil facilities. Their actions included glueing themselves to road surfaces and jumping on top of tankers. They’re demanding that the government stop all new licences for fossil fuel projects and have promised to continue disrupting the UK’s oil supply infrastructure until the government meets their demands.

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