State of the Energy Market – 15th March 2022

Daily Updates

The global natural gas and energy market is under tremendous turmoil following the geopolitical concerns caused by the invasion of Ukraine, as well as the effects of the existing energy price cap tariffs that are soon to be implemented. As the UK’s energy landscape is becoming a key talking point with worries regarding energy security and costs echoing around the sector, we are launching a series of daily blogs to keep you updated with the state of the market.

Gas

The gas price for April 22 closed at 270.92p per therm, down from 311.06p per therm on Friday’s close. After initially opening on Tuesday (14th March) with further reductions, within day prices have started to shift upwards and are currently trading above Monday’s closing price. 

Electricity

The tariffs for April 22 closed yesterday at £302.33 per MWh, down 23.5% on the previous day’s closing.

Energy Supplier Contract Offers

Although prices have been falling, the volatility of the price falls has led some suppliers to still hold off from providing new contract offers.  However, a few suppliers have opened their doors are again offering prices although some of these have limited contract durations to a maximum of 18 months.

In other energy related news:

  • Ahead of the imminent announcement from Boris Johnson regarding an energy security strategy, which is likely to include a ramping up for offshore wind, the Labour Party have put forward a 5 step plan of their own to bolster the UK’s energy security. The plan focuses on a doubling of the on-shore wind levels we currently have, a very large investment in energy efficiency proposals and turbo charging our solar plans.
  • Initial discussions about overturning fracking in the UK have not gone down well with only 5 of the 138 MPs in the fracking target areas voting to overturn the current ban.
  • Ahead of the upcoming budget announcements, Energy UK have sent a written plea to the Chancellor to include in his budget ‘extra measures to protect the UK economy and support households and businesses with the costs of energy’.
  • The UK government is looking at plans to extend the nuclear generation plant at Sizewell B, which is due to close in 2035. The plant has been operational since 1995 and currently meets approximately 3% of the nation’s demand. If the plan gets the green light, it will require investors willing to contribute with an estimated £700 million.

One of the only benefits of the recent high wholesale energy prices is that the companies that operate UK’s offshore wind farms will be contributing more to help with future energy infrastructure costs.  Under the Contracts For Difference scheme, offshore wind companies are guaranteed a certain level of return for the power they generate. If the market price trades above the strike price agreed at the time the CFD contract was agreed, the companies need to pay back the relevant contracted amounts.

Stay Informed!

Get the most up-to-date information about the state of energy market and take the best decisions for your business! By clicking “Sign Up” you are agreeing to our terms and conditions and privacy policy.

  • This field is for validation purposes and should be left unchanged.