Zeigo’s Post

A quick Friday summary from Zeigo's Energy Markets Team... UK Power prices have levelled off over the week. Calendar 2025 UK power is around £88/MWh (+£0/MWh to last week) but ‘26 and ’27 are around £77/MWh (+£0/MWh to last week). UK CPPA prices are around £70/MWh to £85/MWh (CPI indexed) with good project availability meaning there are still opportunities for corporates to go to market for a CPPA. The European energy markets remain flat as well, and front-year German power contract remain flat, trading around €97.5/MWh. CPPA prices for larger volumes in Germany are around €65/MWh to €85/MWh. UK CPPA activity continues with PPAs announced in the market by Tesco and University of Manchester amongst others. Some details are emerging about possible energy policies from Labour and the Conservatives for the election – they are a trifle uninspiring and include... On Oil & Gas there will be a Windfall Tax (until 2029 Cons, possibly 2030 Lab) with Labour upping it to 38%. Whilst Labour is “supportive” of Nuclear they have no set targets whereas the Conservatives are aiming for 24GW by 2050. Both parties will target more Offshore wind, 50GW by 2030 by the conservatives and 5GW more from Labour. The conservatives are targeting 20GW more Solar than Labour (Cons 70GW by 2035), but Labour have an onshore wind target of 35GW (Cons have nothing set) giving a higher target for Labour by 2030 overall. 

Please see our latest Energy Market Update summarising the August 2023 market drivers: https://lnkd.in/esi4CAwm

Ofgem sets out winter expectations for non-domestic suppliers Energy regulator Ofgem has outlined its expectations for non-domestic suppliers to support businesses throughout the winter period. With inflated energy bills expected to return this winter, Ofgem has urged non-domestic suppliers to ensure support is provided to businesses to allow “business as usual”. In fact, the Q1 Default Tariff Cap predictions forecast that energy bills will be over £600 higher than the 2022 winter cap. In light of this, Ofgem reiterated that “we must be prepared for all outcomes”. In doing so, the energy regulator has called on suppliers to ensure customers receive “good service and fair treatment” as they engage in the energy market. The statement comes following an investigation by Ofgem into how suppliers are pricing their deemed contract rates with the final Guidance on Deemed Contract rules having been released as well. If you are worried about your next energy contract contact me today!

Ofgem sets out winter expectations for non-domestic suppliers Energy regulator Ofgem has outlined its expectations for non-domestic suppliers to support businesses throughout the winter period. With inflated energy bills expected to return this winter, Ofgem has urged non-domestic suppliers to ensure support is provided to businesses to allow “business as usual”. In fact, the Q1 Default Tariff Cap predictions forecast that energy bills will be over £600 higher than the 2022 winter cap. In light of this, Ofgem reiterated that “we must be prepared for all outcomes”. In doing so, the energy regulator has called on suppliers to ensure customers receive “good service and fair treatment” as they engage in the energy market. The statement comes following an investigation by Ofgem into how suppliers are pricing their deemed contract rates with the final Guidance on Deemed Contract rules having been released as well. If you are worried about your next energy contract contact me today! https://lnkd.in/eeJdYNp2

Helpful insights in respect of the commercial energy market.

Latest Market Report Energy bills are driven by both the price of energy on the wholesale market and Third-Party Costs (TPCs). TPCs include non-energy costs set by the government, network (the National Grid), policy and system costs and electricity transmission/distribution costs. This pricing report focuses on the wholesale element of an energy price to help you keep track and understand the wholesale energy market and the factors affecting the price of your contracts. May Energy Market: The energy market is currently stable despite recent unplanned outages in Norway. Overall demand is below seasonal norms and rising temperatures have slightly subsided demand. Yet LNG supplies remain limited causing some strain on the market. Lower wind output and several nuclear reactors also being offline for maintenance put more reliance on gas-fired power. Additionally, ongoing attacks on Russian oil infrastructure have added market pressure. This combination of factors of reduced energy demand, tight LNG supplies, and geopolitical tensions maintains a balanced but precarious energy market. Considering the unpredictable nature of the energy market, it's important to factor in various influences like weather, currency, and supply and demand changes. These insights help businesses make better decisions about their energy needs. These reports aim to empower businesses to make better-informed decisions regarding their energy procurement. Bullish Factors (Upward pressure on markets): - Low wind output - Limited LNG supplies - Attacks on Russian oil infrastructure Bearish Factors (Downward pressure on markets): - Demand levels below seasonal norms - Rising temperatures Tim Major Andy Murrill Andrew Marmot Sophie Shrubsole Wilford Augustus Thames Valley Chamber of Commerce

Market Insight – December 2023 We need energy, we depend on energy. We need firm Energy Security. Energy Security that the IEA should lead, control. Adhere the mandate they received 50 years ago. In my weekly posts I keep raising the failure of the IEA (to my opinion). It was clear during Covid, clear when the war in Ukraine became imminent and broke out. In my March 2022 Monthly, I asked if Europe March into the Folly of energy crisis https://lnkd.in/d5z_JKmD I asked to join my call to the IEA to take some measures to avoid energy crisis.   In its 'World Energy Outlook for 2023', the IEA mention its routes to the 1973 energy crisis. Important comprehensive value insights https://lnkd.in/d-KyFG9Y In recently published report 'The Oil and Gas Industry in Net Zero Transitions', other insights appear https://lnkd.in/dtQByUYT   In light of the above, it frustrates to see the OPEC/OPEC+ horror show continues. 'Agrees to extend the oil production cuts'. This week it was announced that Brazil will join OPEC https://lnkd.in/djvebtJa …"Both OPEC and the OPEC+ alliance are actively seeking new members, …increase the alliance's market share and thus the impact of its coordinated policies on oil supply and prices".   The Gas Revolution, the different geographical spread of oil and gas supply portfolio. Note as an example 'Chevron files application for exploration work offshore Namibia' https://lnkd.in/dxHrZcva No real threat to our energy security, under a mature market.   The rest is history – the photo below taken from '1973-1974 The Year in Pictures'. ©The Caxton Publishing Co

11th August 2023 Energy Price Alert – UK Gas & UK Electricity Who said the UK has no energy policy 🤔 Wind output quadrupled, yes QUADRUPLED, year on year yesterday and the sun's out. The sun being out not only provides solar power but also drives up average temperatures which in turn reduces energy requirements (despite aircon), taking demand away from gas and therefore softening prices. Normally we'd expect to see electricity soften more than gas in these situations but because of the spike on Wednesday that is not the case yesterday. Despite the drops we're not back at Tuesday close levels yet for W23 or any other period. W23 was £114.63/MWh for electricity and 119p/therm for gas at Tuesday's close vs £120.03/MWh and 128.35/therm at last nights close. Our view is that electricity could still drop while gas is on an upward trajectory, despite short term readjustments to Wednesday's spike. The news from China yesterday regarding deflation is double edged. Demand will be low but the ruling party will be more focussed on their stimulus and may want it to kick in soon given that Chinese New Year (CNY) is early in our New Year and the whole country shuts down for 2-3 weeks then while workers travel home. Our wish would be that, in true Chinese style, they take the long term view so that the stimulus kicks in after CNY. Whether China can absord the loss of face by having a deflationary economy on the world stage is a key question that will impact the price we, and the rsst of the world, pays for natural gas. On the generation front it's fascinating - if you like this sort of thing 🥸. On the lower table below you'll see that last week renewables produced 29.7% of our generation vs fossil fuels at 36.5%. Today renewables are currently at 53.6% with fossil fuels at 12.3%. The balance on both is made up of Other Sources which is predominantly nuclear. Have a great weekend https://lnkd.in/eHVd47EV