Businesses to be Penalised for Gas Losses

Submitted by aspect on April 20 2011
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A modification to the Gas Network Code came into effect on April 1 which relates to an “Unidentified Gas Charge” (UGC) that will be passed on to users.
 
Unidentified Gas is gas which is taken off the system but is not directly attributed to a particular supplier or shipper. There are a number of reasons for unidentified gas, the main ones being theft by an end user and unregistered supply points.
 
Previous to this modification the costs were split between Small Supply Points (SSPs) where the AQ was less than 73,200 kWh. The change means that the cost will also be split between all NDM Large Supply Points (LSPs).
 
The total bill for the Unidentified Gas Charge is £2.75 million pounds or 0.002328ppkWh for all LSPs. So if your AQ is 500,000 kWh there could be an additional daily charge of up to 3p per day.
 
The market should be working harder to resolve these issues rather than passing out to end users and Orchard Energy will be writing to Ofgem and the UIA to push for this to avoid penalising trustworthy and reputable business.

Energy prices set to remain high for the long term

Submitted by aspect on April 17 2011
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Rising consumer confidence in the US pushed oil prices upwards for three days in a row last week with futures going up by 1.8% on the back of increasing manufacturing production. Crude oil for May delivery increased to $109.92 a barrel on Friday.
In addition to growing consumer confidence in the US, China’s economy grew faster than predicted in the first quarter of this year, rising by 9.7%. With both the world’s biggest energy consumers reporting manufacturing growth, OPEC raised its demand forecasts.
Meanwhile Middle East unrest continues to impact on prices, which have risen by 20% as unrest has spread through Tunisia, Egypt, Bahrain, Libya and other countries in the region. Elections in Nigeria this month may also lead to disruption to crude output from the country.
Some analysts predicted this week that Brent will trade between $120 and $125 for some time in response to geopolitical issues and energy prices seem unlikely to fall in the foreseeable future.

For advice on energy management for your business call Orchard Energy on 0844 581 0844.

German Decision on Nuclear Could Signal Gas Price Rises

Submitted by aspect on April 10 2011
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We are monitoring gas prices closely following the announcement by German Chancellor Angela Merkel that the country would turn its back on nuclear power after the crisis in Japan.
German power for 2012 rose by 10% after Merkel’s announcement hitting a 19-month high.
Reaction to the Fukushima meltdown across Europe and in other parts of the world has sent natural gas prices upwards and the search is on for alternative energy sources. Nuclear accounts for about a quarter of Germany’s energy supplies and Germany may look to Russia for gas supplies to satisfy the shortfall.
However, gas futures fell at the end of last week after forecasters predicted mild weather in the eastern US. Natural gas for May delivery fell 1.6 cents on the New York Mercantile Exchange settling at $4.041 per million British thermal units.

Putting 2011 Energy Prices in Context

Submitted by aspect on April 01 2011
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Although the energy market may seem high at the moment a quick look back over the past few years demonstrates that prices today are nowhere near where they were at their record highs in 2008.

Market activity was very different then too. In 2008 the markets shot up in just six months whereas today’s market has gradually moved upwards, even during the peak and the recession.

Prices have reached their current level over the course of two years, making it unlikely that they will fall back in the way that they did after the sharp rises of three years ago.

History of oil and gas prices between 2008 and 2011:

(figures are not exact, but are to within one or two units and give an overall picture of activity over time)

At the beginning of 2008 Electricity was trading at about £55MWh & Peaked at £100 MWh in June/July and dropped back to about £50MWh in December 2008.

At the beginning of 2008 Gas was trading at about 55p/Therm & Peaked at 100p/Therm in June/July and dropped back to about 55p/Therm in December 2008.

At the beginning of 2008 Oil was trading at about $90 Barrel & Peaked at $147 in June/July and dropped back to about $40 in December 2008.

Beginning of 2009 Electricity was trading at about £55MWh & continued to fall and ended at about £37MWh in December 2009.

Beginning of 2009 Gas was trading at about 60p/Therm & continued to fall and ended at about 36p/Therm in December 2009.

Beginning of 2009 Oil was trading at about $45 Barrel & continued to RISE and ended at about $80 in December 2009.

Beginning of 2010 Electricity was trading at about £40MWh & continued to RISE and ended at about £51MWh in December 2010.

Beginning of 2010 Gas was trading at about 38p/Therm & continued to RISE and ended at about 60p/Therm in December 2010.

Beginning of 2010 Oil was trading at about $78 Barrel & continued to RISE and ended at about $92 in December 2010.

Beginning of 2011 Electricity was trading at about £51MWh & has continued to RISE and is currently at about £57MWh.

Beginning of 2011 Gas was trading at about 58p/Therm & has continued to RISE and is currently about 68p/Therm.

Beginning of 2011 Oil was trading at about $92 Barrel & has continued to RISE and is currently about $115.

 

By Gareth Henderson, managing director of Orchard Energy www.orchardenergy.com  0844 581 0844