State of the Energy Market – 4th April 2022

Daily Updates

Monday (4th April) followed a very similar approach to Friday with the market initially opening with an increase in prices, but as the day has worn on, prices have been falling and May 22 is currently 6% down for gas and power is 3% down compared to Friday’s close. The falling market prices again follow the fact that Russian gas volumes into Europe have remained strong and have even increased by 12% through the Ukrainian gas pipeline.


After initially opening approximately 4% up against the previous day’s close, wholesale gas prices tailed off on Friday (1st April) and the market closed at 257.32 pence per therm for May 22. Although there was plenty of concern over the decree signed by President Putin to demand payment of Russian gas in roubles, the fact that Russian gas continued to flow into Europe at healthy levels removed some of the fears that the gas flows from Russia would stop and this helped to turn prices around on Friday.


Wholesale power prices also ended up closing down on Friday (1st April) against Thursday with May 22 falling by 11.6% closing at £220.70 per MWh.

In other energy related news:

  • April will be an interesting month to see where European countries stand in relation to the demand for Russian gas to be paid in roubles, which Russia state will need to be done by opening new accounts with the newly formed Gazprombank.  Some countries like Lithuania have already said that they will be stopping Russian gas imports altogether and are securing long term LNG deals with alternative suppliers, whilst others will continue to search for a diplomatic resolution to what will be an end of April deadline. We have yet to see many takers form an orderly queue for the line marked ‘yes, we agree to pay you in roubles’.
  • The speculation about the possibility of the UK government stepping in to take control of the UK supply arm of Gazprom continues.  It appears that Gazprom have had difficulty in finding a new owner for the business and concern remains as to whether they will be able to continue to trade in the UK energy markets if no other entity is prepared to trade energy with them.  Gazprom have yet to make any official announcements about the recent developments.
  • Defects in nuclear reactors have been found in some French generating plants.  This follows on from the previous problems found in December 21 and has led to some eye watering day ahead prices on the French market where prices in the region of 3,000 euros per MWh have been seen due to France’s heavy dependence on nuclear.  Almost 70% of France’s supply mix comes from nuclear generation and so prices are expected to stay high. The French government will soon be left with no option but to ask industrial and commercial customers from non-urgent sectors to reduce their consumption to ensure the domestic market can keep the lights on.
  • Housing Minister Eddie Hughes has put out a warning to landlords, that he will looking out for potential overcharging by landlords in the Homes in Multiple Occupation (HMO) sector. The expectation is that, in line with all other industries, this sector has, and will continue to see large increases in their energy bills. The view by Eddie Hughes is that these costs should not be passed on unfairly by landlords to HMO tenants mid-way through existing contracts.\  He added that if the landlord is responsible for paying the energy supplier and they bill for these costs separately to the rent, the landlord can only charge the tenant for the maximum resale price, which includes the energy that the tenant has used, the tenants share of the standing charge and the respective VAT.  Under Ofgem guidance, the landlord will be able to pass on any costs created by consumption underestimation, e.g. where meter readings have been estimated for a long time, but anyone charging more than the maximum selling price could face civil proceedings to recover the amount overcharged plus interest.    


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