State of the Energy Market – 25th March 2022

Daily Updates

The big announcement regarding LNG deliveries from the US to the UK and the rest of Europe was made on 24th March, meaning that President Biden confirmed that the US would deliver an additional 15 billion cubic metres (BCM) of liquified natural gas (LNG) to Europe during the rest of this year.  This has added confidence to energy markets and helped to lower prices on Friday (25th March), with April 22 currently trading at 12% lower compared to Thursday’s close for gas and 10% lower for power


Wholesale gas prices opened up on Thursday (24th March) and continued to rise throughout the day until the late afternoon. A selling surge caused prices to trade at lower price levels and at the close of play, we saw April 22 end up at 264.82p per therm, which was a 4.7% fall on the previous day’s close.


Wholesale power prices very much followed gas, initially opening upwards and continuing at higher levels before eventually performing an about turn in the late afternoon.  April 22 closed at £228.88 per MWh, which was a 3.3% fall against the previous day’s close.

In other energy related news:

  • The additional 15 BCM of LNG has been welcomed with open arms by the UK and Europe but, given that we have already received 16 BCM from the US since the start of the year, this measure alone will not replace all our requirements for gas should the taps from Russia be turned off.  In 2021, Russia provided Europe with 155 BCM, which was approximately 40% of Europe’s overall consumption for the year. So, although the 15 BCM announced is not a drop in the ocean, it is by no means the silver bullet solution to resolve our dependency on Russian gas this year.
  • Various European leaders have reacted negatively to President Putin’s demand that all future payments for Russian gas are to be made in Roubles.  Some refer to existing contract clauses as a reason to not pay in Roubles and others are simply stating that they won’t do it. Following Putin’s comments earlier in the week, the Rouble closed at the highest level since the start of the war adding value to Putin’s comments. However, with European countries appearing to refuse to do this, we seem to be on the way to an interesting head on collision of views.
  • In a move to accelerate the growth of on-land wind farms, the government is considering enabling local communities to benefit from lower energy bills if they have a wind farm built in their area. The move is seen as a way to counter resistance from local residents to having the wind turbines erected thereby spoiling the view of the local landscape.

If you are currently paying for your electricity at home through a standard variable tariff and are therefore protected by the domestic price cap, our suggestion is to take a reading of your meter on 31st March and that you communicate this to your energy supplier.  This will avoid the supplier charging you for any consumption you used prior to this date at what will be significantly higher rates from 1st April.

Get in touch with us to see how your costs will be impacted – We can help you find solutions to mitigate against this.