State of the Energy Market – 8th April 2022

Daily Updates

Although the Norwegian gas flows to the UK appeared to be back to normal levels following a small decline in the last couple of days, the amount of gas reaching Europe via the Ukrainian gas pipeline has dropped. Wholesale energy prices opened up approximately 4% on Friday (8th April) and have remained at a premium throughout the day against last night’s closing prices for gas & power.

The pipeline operators have tried to reassure their customers that all contracted volumes are being met, taking a ‘nothing to see here, move along’ approach. However, the reduced volumes of energy are a consequence of the Russian forces disrupting operations at the Vopskov gas compressor station in Luhansk, therefore the markets are seeing this as a cause for concern, and the prices have moved up on Friday, 8th April.

Gas

Wholesale gas prices moved downwards on Thursday, 7th April, with May 22 closing at 233.49 pence per therm, 2.5% down against the previous day.

Electricity

Wholesale power prices also moved down on Thursday, 7th April, with May 22 closing at £206.67 per MWh.  This was a 2% fall against Thursday’s closing price.

In other energy related news:

  • The UK government has unveiled a package of support worth £375 million in investment for energy technologies of the future. This includes £240 million to support the production of hydrogen, £2.5 million of funding to develop the next generation nuclear technology and £5 million for the development of Carbon Capture and Storage (CCS).  CCS has previously been declined by the government for not being economically viable. This change of approach does indicate that the government are acknowledging the need to continue the use of fossil fuels as we transition towards a carbon free future. CCS will capture the carbon emissions generated by burning fossil fuels and then store them in former gas fields, thereby stopping the release of the emissions into the atmosphere.
  • EoN have come out amongst a group of dissenting voices to strongly criticise the UK government’s energy security plan. As we reported, the surprising lack of initiatives in the plan to improve energy efficiency within the UK housing stock is the main point of their attack.  Given that the UK has some of the coldest and most draughty homes in Europe, ‘by abandoning any extra commitment to helping people to improve their homes, the energy security plan condemns thousands more customers to continue living in sub-standard conditions, wasting energy and paying more than they need to for their heating’, said the EoN representative.
  • Another country appears close to breaking their dependence on Russian gas.  Finland is ready to spend 850 million euros in renting a floating LNG terminal, which they will share with Estonia, in order to replace the need for their remaining Russian gas consumption. Finland has a good level of nuclear generation and are therefore one of the European countries that have the least dependence on Russian gas, and once completed, this step will mean they can join Lithuania in being 100% free of Russian gas.

Stay Informed! Are your utilities up-to-date?

We are here to advise you on every aspect of usage, procurement and net zero reporting for electricity and gas! Get in touch for a free no-obligation quotation.