Get the inside track on the latest developments in energy policy and the market here. Register once and you won't need to register again.
This document aims to remind us of some of the major changes we have seen in energy markets and policy over that past year and also provides some insight into potential changes to come in 2016.
The preliminary results of the second Capacity Market auction have now been published and the auction clearing price was set at just £18/kW, compared with £19.40/kW at the first auction.
The government on 18th November 2015 announced that it will be launching a consultation on ending the use of coal-fired power stations by 2025 and replacing them with gas. In the statement, Energy and Climate Change Secretary Amber Rudd also announced continued support for new nuclear and hinted at further support for offshore wind.
Last month we wrote about our concerns around tightening supply margins in the UK over the next decade due to imminent coal power station closures. This month we delve further into the issue, and focus on how the latest policy changes are likely to impact the power generation landscape in the UK.
Electricity supply margins are expected to be at their tightest in a decade this coming winter, according to National Grid. And with the latest announcement that Eggborough coal power station will be closing in 2016, we'll be losing a total of 5.4GW (or 28%) of existing coal capacity by the start of next summer. It is also likely that generating margins will continue to tighten further through the remainder of the decade as additional coal plant is closed due to policy measures and poor profit margins.
The Conservatives have won the election with 331 of the 650 seats, five more than was needed for a Commons majority. The Labour party trailed with 232 seats after losing a significant number of Scottish seats to the Scottish National Party (SNP) who secured 56 seats, the third largest share. The Liberal Democrats lost 49 seats to secure only 8 seats in the Commons. Plaid Cymru won three seats while the Green Party and UKIP each won a seat1.
This document reminds us of the three key energy pledges from the seven main parties and provides Utilyx’s view of what a Conservative government could mean for energy policy, developers and end user bills. We outline the opportunities for end users facing in to the new energy paradigm.
The summer 2015 budget announced that the CCL exemption will be removed from 1st August 2015. The industry is still reeling from the impact, and with many decisions still to be made the impact on business energy users and generators is largely unknown. This means specific answers are still not possible, however having discussed the issues with HMRC, Ofgem, suppliers and generators we look to provide some further clarity on several questions in this document.
Crude oil has shed roughly 60% of its value in the past six months, but what impact has this drop had on UK gas and power prices? Although Europe has well established and competitive gas and power markets that operate separately from the global oil market, the abundance of oil-indexation in gas pricing means the price of oil has an impact on wholesale both gas and power pricing
The West and Iran have finally reached an agreement on the Tehran Nuclear Deal after years of talks and delays. There now looms a possibility of up to 1mn bpd of Iranian oil being reintroduced in the global market — which is already oversupplied — over the coming months.
The government announced a series of low carbon policy changes last month that are likely to significantly slow investments into renewable energy whilst also increasing the policy risk in investing in renewable capacity in the UK. The measures will also increase the likelihood of the UK missing its 2020 renewable energy targets and could also weaken the government’s hand at the COP21 climate negotiations in Paris in December.