State of the Energy Market – 22nd July 2022

Daily Updates

Wholesale energy prices have moved up within day. Aug 22 gas has been trading approximately 5% up and Winter 22 is approximately 3% up at the time of writing. Power prices have been more neutral today and we expect to see both prompt and curve prices to close at similar levels to yesterday (21 July 2022).

Power

August 22 wholesale power prices increased by 7.9% to close at £284.20 per MWh.

Gas

August 22 wholesale gas prices increased by 10.4% to close at 296.13 pence per therm.

In other energy related news:

  • New energy saving measures have been announced by the German government this week as the country prepares for a continued reduction in gas volumes that it receives from Russia. The plans
    include a ban on heating swimming pools in private homes, the suspension of minimum
    temperatures in rented apartments and suggesting that the amount of home working increases
    with a view to reducing office heating during winter. Germany will also be increasing their target for
    the amount of gas they have in storage facilities to 85% by 1st of October and 95% by 1st November
    this year. 
  • Work will start later this year on the first power interconnector between the UK and Germany.
    Cables running for 700km will pass through UK, Dutch and German waters to connect the two
    countries at Isle of Grain in Kent and Lower Saxony in Germany. The interconnector will be called
    Neuconnect and will ‘enable the two countries to share excess renewable power and ensure there
    is no wastage’, said Miguel Berger, the German Ambassador to the UK. Gregg Hands, the UK’s
    Energy and Climate Change Minister said, ‘When it comes online, Neuconnect will open new
    opportunities for the UK to export cleaner and cheaper renewable energy and reduce our exposure
    to volatile fossil fuel prices.’ 
  • Centrica has been given initial approval to reopen the Rough gas storage facility that was closed in
    2017.
     There are still further permissions that will need to be granted but they are now clear of the
    first hurdle. If it does come back online, the facility will approximately treble the amount of gas
    storage currently available to the UK.

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