- 26 July 2011

Filed under: Latest News - Felipe @ 8:34 pm

Business Energy Costs and Supply Pose a Threat to Business Owners

A recent survey from Datamonitor indicates that business energy costs and security of supply are amongst the biggest threats to a business performance. The survey asked business leaders to rank various threats to their business performance and energy costs ranked above common risks such as health & safety, security and taxes. Business energy costs were given a risk ranking of 6.6 out of possible 10 while security of energy supply scored a 6.1.

What is even more alarming is the fact that, one in six major business energy users still don’t have a policy to manage their energy usage. When asked what is the reason for not having an energy policy in place, 51% attributed it to lack of finance, 38% stated that they do not have the resources to manage such projects and 62% said that investing in energy generation and demand management technology themselves is not a business priority.

Datamonitor’s survey is part of npower’s annual report to monitors business opinion on energy use, risks and CO2 emissions, the report is also knows as npower’s Business Energy Index.

npower’s director of industrial and commercial markets David Cockshot commented on the findings:

“It is worrying that while businesses have identified that risks associated with energy – from security of supply to cost – pose a real threat to their immediate and future operations, many have admitted to not having a strategy in place to manage it. This could be because they don’t believe the two main areas of concern – cost and supply – are something within their control.”

In a bid to help businesses across the country to better manage their energy usage and improve their energy efficiency, npower released a white paper listing of the top five risks for energy management and five solutions to improve it:

Business Energy Management Risks

Continued upward trend in energy prices
Increased volatility in energy prices
New price risks from carbon regulation
Reputation risks from carbon regulation
Increasing regulatory and technological complexity.

Energy Management Solutions

Assign clear responsibility and targets for energy management, energy consumption and energy efficiency
Make energy and carbon an issue for senior management through regular reporting
Take advantage of energy management services and products offered by the market
Conduct an energy audit to gain a head-start on energy efficiency
Explore the possibility of, and any available government incentives for, renewable energy production on-site.

There are other ways businesses could manage and improve their business energy efficiency and usage, one of them by reviewing their energy contracts or hiring the services of an energy consultancy firm such as Catalyst.

Opposite to what many business owners think, hiring an energy consultancy firm is extremely cost effective and it sure pays off with a mid to long term return over investment.

“A ‘fresh pair of eyes’, with relevant experience of achieving tangible results in other organisations, can often uncover areas for significant improvement that may not have been previously identified.”

If you would like more information on our range of services or would simply like to find out how this could benefit your business, simply call our energy team today on 0870 710 7560 or request a call back at time to suit.

Or you might want to subscribe for further information on the Business Energy Costs & Supply from our site.

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EMR to Benefit Business Gas:

- 19 July 2011

Filed under: Latest News - Felipe @ 11:44 pm

EMR to Benefit Business Gas

Energy Market Reform encourages the construction of business gas power plants

A week after the Electricity Market Reform (EMR) White Paper was published by the energy secretary Chris Huhne, industry experts and analysts have come forward to express their opinions and predict the future of the UK energy market. One of the most commented scenarios is that new measures will cause a new “dash for gas”.

The new measures are set to make the UK “ready to lead the world in the next energy revolution”, said Chris Huhne. The EMR main objective is to encourage investments in renewable energy generation resources as well as nuclear and implement a stronger emissions controls to prevent new coal plants being built in the next 20 years unless they are carbon capture ready.

In fact the new Emissions Performance Standard (EPS) will apply to all fossil fuel-fired plants larger than 50MW from 2014. The new limit will be set at 450gCO2/kWh which means that new OCGT gas plants as well as coal would have to fit CCS to meet emissions levels or limit their load factor.

Even so, gas fired power plants will still be a viable option and reason why energy market analysts are predicting that there will be a surge in the numbers of business gas fired power plants being built in the UK over the next few years.

Open Cycle Gas Turbines (OGCT) are the cheapest type of power plant to build as well as the fastest, not to mention that they have low CO2 emissions levels and can respond fairly quickly to peak demands.

But a strong reliance on natural gas won’t bring the security needed for the UK energy market since most gas is imported and susceptible to unpredictable price changes. According to some independent business energy brokers a stronger reliance on gas would only reduce our energy security.

The modelling in the impact assessment suggests that there will be at least 12GW of new CCGT gas plants built over the next twenty years – greater than the average of 9GW of nuclear power but less than the expected 21GW of renewable energy (mostly offshore wind) envisaged.

Up to Date Wholesale Business Gas Prices

Winter 2011/2012 gas contracts firmed at 70.85 p/th, while gas for August traded at 54.65 p/th. Day-ahead gas prices were at 55.25 p/th on Monday morning, only slightly above Friday afternoon’s 55 p/th.

Or you might want to subscribe for further information on the EMR to Benefit Business Gas from our site.

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UK Energy Market Reform:

- 12 July 2011

Filed under: Latest News - Felipe @ 2:16 pm

UK Energy Market Reform

White Paper on the UK Energy Market Reforms

Today is a very important day to the UK energy market, probably the most important since it privatised 20 years ago. The Energy Market Reform White Paper is due to be published and will determine the future of the industry for the next 20 years.

The UK Energy Market Reform white paper is expected to provide fresh details on how the government plans to stimulate investments to the renewable energy sector to help the UK meet the 15% target of electricity generated from renewable sources by 2020. How it plans to reduce the Big Six monopoly and the details of the emissions performance standard to block plans for new unabated coal-fired power plants.

It is estimated that the UK needs £200 billion of investments by 2020 to meet its climate commitment goals and the government plans to spark off investments by stipulating a set price for low carbon electricity which includes nuclear that will then be passed on to household and business energy prices.

According to market analysts this is a very sensitive announcement, especially after British Gas price hikes – gas up 18% and electricity up 16% – announced last Friday which we commented on here in last week’s article.

The energy secretary insists that the reforms will help increase energy and price security and a long term reduction in bills. Speaking to the BBC Mr. Hune said:

“Once you take the effect on bills you actually find that we’re getting overall bill down in the long-run,”

One of the most important points to be dealt with is the reduction of the Big Six monopoly and the white paper should at least reduce their stranglehold. Right now these utilities companies supply 97% of the energy consumed in households and reforms must prevent them from lock themselves in for the next 20 years as the only ones able to play in this market.

UK Energy Market Reform

The government must require complete transparency around the way Big Six generate and sell energy to buffer households and businesses from price hikes. It also has to provide more encouragement to small energy supply companies guaranteeing they actually have someone to buy energy from.

Demand management is another topic that will be dealt with on the UK Energy Market Reform as experts suggest it is too early to for the government to come up with a new capacity mechanism as the increase of smart meter usage, development of interconnectors and storage systems might eradicate the need for “peak demand”.

Last but not least important is the establishment of the emissions performance standard that will limit coal power plant’s CO2 emissions to 450 grams of carbon dioxide (CO2) per kilowatt hour of power production. The idea is to stop all coal power plants from generating energy within the next three years.

Or you might want to subscribe for further information on UK Energy Market Reform White Paper from our site.

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Energy and Gas Price Increases:

- 5 July 2011

Filed under: Latest News - Felipe @ 11:35 pm

Energy and Gas Price Increases

British Gas Hinting at Energy and Gas Price Increases

Despite being investigated by Ofgem for unfounded energy and gas prices increases and threats of being reported to the Competition Commission, Britains biggest utilities suppliers are hinting at price increases within the next few weeks.

Last week we reported that the energy regulator Ofgem was investigating the Big Six under the accusation of deceptive marketing information and groundless energy and gas prices rises. Regardless of this fact British Gas announced energy and gas price increases within the next few weeks.

According to respectable news sources reported that Centrica, British Gas parent company may raise gas and electricity prices before July 28th. But Centrica spokesman Julian Mears refused to comment on the subject.

British Gas chief operating officer Ian Peters said that the company could no longer absorb wholesale energy prices and will have to pass them on to its customers.

Here is what he said while speaking to the Parliamentary Energy Select Committee:

“Unless there is a fundamental shift in the way the commodity markets are going to play out in the next few weeks then, on the balance of probability, we will reluctantly put the price up,”

and added:

“But I’m not going to get drawn into precisely when or how,”

Centrica is following the footsteps of Scottish Power which on the beginning of June announced a price rise of 19% for gas and a 10% for electricity to take effect from 1 August 2011.

Based on data provided by Ofgem wholesale energy prices went up 30% since December which is forcing costumers to switch energy suppliers to those who offer fixed price tariffs.

“59% of those switching their energy supplier are – 205,000 households a month – choosing a fixed price energy tariff reports Uswitch.com

“The debate is no longer about what is going to happen to energy prices – it’s now about what action consumers intend to take,” said Tom Lyon, energy expert at uSwitch.com.

Commercial and business gas brokers are also expecting a surge in procurement requests by their clients, in order to review their current contracts and to help them find fixed rate tariffs for gas as well as energy prices.

“ When energy and gas price increases hit the headlines, we often see an immediate surge in activity as it highlights concerns about business gas prices for consumers. ” – said Chris Hurcombe energy broker at Catalyst.

Energy and Gas Price Increases

Within-day gas prices gained 0.60 pence to 56.35 pence per therm at 1635 GMT, while Tuesday gas rose 0.35 pence to 56.25 pence, after prices had fallen slightly on Monday morning.

Front-month August gained slightly, trading up 0.40 pence to 56.30 pence, while Benchmark winter 2011/12 gas rose to the 71.00-pence mark on Monday afternoon, up 0.80 pence from the previous session.

Baseload power for day-ahead delivery traded at 49.50 pounds per megawatt-hour, roughly in line with trading levels of around 50 pounds on Friday. source: Reuters

Now the big question is: How long till other major utilities suppliers announce energy and gas prices rises? Have your say in our comments.

Or you might want to subscribe for further information on Energy and Gas Price Increases from our site.

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Energy Market Report July 2011:

Filed under: Latest News - Catalyst Commercial Services Ltd @ 12:04 pm

Energy Market Report July 2011

Our monthly analysis of the UK gas and power markets is now available on line for the month of July 2011. The service is intended to keep you up to date with all the major news in Europe’s gas and power markets. It is also designed to keep power executives focused on market activity in an easy to digest format.

Your find our July 2011 report here and all historical energy reports can be located here.

If you would like more information on our services or would like to find out how this could benefit your business, simply call our energy team today on 0870 710 7560r request a call back at time to suit.

Or you might want to subscribe for further updates direct from our site.

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