The changes could see charges drop for Scottish electricity generators by around 60% whereas generators in the South East that receive payments under the current system may face charges under new plans.

The determination of big energy companies to make significant investments in shale gas exploration seems to be showing no signs of abating despite environmental concerns across the globe.

Bloomberg’s Julie Hyman reported from the US that overseas deals involving shale exploration added up to $51bn last year.

She said the hunt for new shale gas opportunities seemed unaffected by the fact that natural gas prices had plummeted and she attributed this partly to the fact that shale exploration also taps into reserves of ethane, butane and methane which have not seen prices fall to the same degree.

The controversial fracking method used in shale gas extraction involves pumping water, sand and chemicals into fissures in the ground to allow the release of oil and gas. Some environmentalists have questioned whether the process leads to chemical seepage in ground water and the presence of chemicals in water has been confirmed during tests in the US Mid West.

Some observers have also blamed earthquakes and tremors in Blackpool, England, and Ohio in the USA on shale gas exploration.

However, energy companies continue to explore large parts of the US including Pennsylvania, Ohio, Texas and Oklahoma and the Financial Times reported in November that the UK has “significant” shale gas reserves.

Hard-pressed retailers are being encouraged to reassess the way they use and monitor energy usage as a way of cutting overheads.

Yorkshire energy management consultancy Orchard Energy, which advises many big retail names including Barker and Stonehouse, Barratts Priceless, Costcutter, Sheffield’s Meadowhall centre and the Ridings shopping centres in Darlington and Bristol, says simple efficiency measures could shave thousands of pounds off annual energy bills at a time when the sector is facing some of its toughest trading for conditions for decades.

“We tend to find that retailers with multiple sites are on half hourly metres which are bigger and more expensive than they need but can be easily downgraded,” said Gareth Henderson, Managing Director of Orchard Energy.

“Sites that rely on store managers to take readings can find themselves paying inaccurate estimated bills which are rarely rectified, a problem that can be overcome by installing smart meters that take automated readings.”

Mr Henderson said part of his firm’s work with major retailers involved negotiating down the bonds and deposits demanded by some energy suppliers.

“Forward purchasing is another way retailers can reduce and manage costs, helping with budget forecasting and protecting them from fluctuations in what is currently a very volatile energy market,” he said.

Barbara Winston, centre manager at the Ridings Shopping Centre, said retailers were under unprecedented pressure to keep costs under control.

“Our costs are rising significantly, particularly in relation to energy, at a time when many retailers are struggling to keep their heads above water.

“Our business has taken advice on energy purchasing and on reducing the administrative burden associated with managing energy contracts and red tape.

“There’s a general lack of awareness in the retail sector about the efficiency measures that can be taken but our spending in this area is constantly under review, particularly as energy represents one of our biggest overheads,” she said. 

For advice call Orchard Energy on 0844 581 0844

Key Factors Influencing Today’s Energy Prices

Energy prices remain high in comparison to the same time last year but are there signs of a change and what can we expect in the months ahead?

The majority of industrial and commercial customers have their energy contract renewal dates in October, making it a difficult month for suppliers. It can be hard to secure pricing information on contracts in the weeks leading up to October renewals and the large number of big energy contracts being traded pushes up demand and impacts on prices.

Here are some of the factors currently influencing the markets:

• Concerns about a double dip recession continue to rumble with Harvard economics professor Martin Feldstein putting the odds at 50% and Lloyds TSB suggesting the UK recovery is being threatened by lack of investment in small to medium businesses. A slowdown will indicate reduced demand and lower prices. The IMF has recalculated global GDP down to 4.3% this year, again signaling demand reduction.
• Long term storage of energy stands at 92.82% and this may encourage slight price falls when demand increases in the October Rounds.
• The UK will see a quarter of its generating capacity shut down within a decade and it’s estimated that the work required to update our infrastructure will cost around £200 billion. Some of this cost will inevitably be passed onto consumers through higher energy prices.
• There are concerns about the long term availability of Liquid Natural Gas supplies with experts predicting tightening by the end of this year and into next. With LNG making up between 30% and 50% of our gas supplies any shortages of concerns about supply will push prices up.
• Demand for LNG from Asia and disruptions to Libyan supplies have pushed LNG prices towards a three-year high. This has a big impact on the UK’s energy prices as we have now overtaken Spain as the largest European consumer of LNG in Europe.
• Japan has been buying in LNG to compensate for the lost generating capacity following earthquake damage to its power plants in March which is again putting pressure on supplies.
• In addition, the Japanese nuclear crisis prompted Germany to shut down its pre-1980 nuclear plants and a decision has now been taken to close these permanently, potentially adding to the pressure on LNG supplies and pushing up prices.

So how does this affect 12 month energy contract purchasing for users with renewal dates in the coming weeks? Businesses looking for 12 month gas contracts with an October start date were looking at prices of 66.04p/therm on August 8 but by August 26 the same contract was selling for 68.75p/therm. This represents a price rise of 4.10% in three weeks. Oil prices tend to follow the same pattern as gas and oil has seen a 2.77% rise in the same period. Curve and prompt prices have also strengthened. With so many local and global factors influencing prices the markets remain volatile and predicting prices can be challenging. Our pricing analysts keep a close eye on the markets throughout the day, every day, and can offer up to the minute advice on contracts, renewals and forward purchasing.

To discuss energy management and purchasing for your business contact one of our team on 0844 581 0844.

We're delighted to announce that Orchard Energy and Orchard Environmental have achieved ISO 14001 accreditation.

In order to become ISO 14001 compliant, Orchard Energy and our waste management division Orchard Environmental, had to prove we had policies in place that helped us reduce our environmental impact.

Our "green team" meets weekly to assess how we can reduce, monitor and review the way we operate.

They will be looking at vehicle consumption, disposal of office furniture and electrical equipment, recycling, waste and energy.

The two sides of our business - energy and waste management - complement one another and much of our work involves improving efficiency in relation to energy consumption and waste on behalf of our clients.

ISO 14001 is therefore perfectly suited to the operation of our business, which is all about managing business resources effectively.

Orchard Energy’s Energy Solutions Teams have reported a surge in enquiries from businesses and organisations looking at solar energy, wind turbines and other renewable energy sources.

They have also been advising on energy efficiency, looking at ways of reducing consumption and cutting overheads.

Orchard recently advised St Mirren Football Club after the club made a decision to look into converting energy supplies at the ground from traditional to renewable sources.

The Scottish club’s plans could see the installation of around 500 solar panels to the stadium roof, a move it hopes will lead to a dramatic reduction in electricity bills.

Orchard Energy provides bespoke quotes for site surveys, system designs, cost analysis, procurement and installation of multiple energy saving products and services.

We carry out feasibility studies ranging from  non-technical to equipment specific audits to identify problem areas and solutions that can increase efficiency and reduce costs.

We also advise on solar panels, rainwater harvesting and wind turbines, all of which are becoming increasingly popular options for heavy energy users, including those in the manufacturing sector.  

So whether it’s renewable energy options, energy efficiency measures, consumption reporting or metering and new connections out Energy Solutions Team can work with you to find the best option for your needs.

Contact us today on 0844 581 0844

Orchard Energy has been recognised for its outstanding contribution to training by Calderdale College.

The firm was shortlisted in the medium business category for its contribution to training in the service sector and was one of 200 businesses to attend this week’s awards ceremony.

"To have had our work in this area recognised at such a major regional business event is a fantastic achievement and acknowledges the importance we place on training within our business,” said Managing Director Gareth Henderson.

The firm was also nominated for the prestigious award for Outstanding Contribution to Training, being one of the top three firms shortlisted alongside First Bus Group and Wilby Insurance Ltd.

“Both these organisations are big players in the business community so to be nominated alongside them is a great achievement,” said Mr Henderson.

“I’d like to commend all of those within Orchard Energy who have come through and are still on the apprenticeship courses and thank those who have worked hard to train them.”

The discovery of gas west of the Shetland Islands has been greeted with concern by members of the Energy and Climate Change Committee who are unsure if the oil industry is ready to undertake deepwater drilling in this inhospitable offshore area of the North Sea.

However, the Edradour exploration well run by Total and Dong Energy is at a water depth of 300m.

Total’s Patrice de Viviès said it was a “meaningful discovery”. The company has been drilling in the North Sea since 1962, where it continues to be a key player and produces 10 % of its overall output.

A flexible energy contract allows businesses to spread energy purchasing decisions through the life of the contract, taking advantage of market conditions and helping them reduce costs and overheads.

Part Fixed Part Floating (PFPF), Flexible Contracts and Market Trackers can deliver significant benefits to businesses with substantial energy consumption.

What are the benefits of a part fixed part floating energy contracts?

1. It allows you to select your supplier without entirely committing to current price levels.
2. It allows for more advanced purchasing strategies to cut overheads and save your business money.
3. By spreading the risk you can reduce the impact to your business of volatility in the market.
4. By purchasing direct from the wholesale market you are able to influence the largest component of your energy costs – 70% of your final bill price is for energy generation.
5. A managed energy contract alongside energy reduction measures will improve efficiency within your business and help drive down costs.

For further advice on energy management, flexible contracts and energy reduction contact Orchard Energy on 0844 581 0844.

What are the Benefits of Flexible Energy Purchasing?

A flexible energy contract allows businesses to spread energy purchasing decisions through the life of the contract, taking advantage of market conditions and helping them reduce costs and overheads.

Part Fixed Part Floating (PFPF), Flexible Contracts and Market Trackers can deliver significant benefits to businesses with substantial energy consumption.

What are the benefits of a part fixed part floating energy contracts?

1. It allows you to select your supplier without entirely committing to current price levels.
2. It allows for more advanced purchasing strategies to cut overheads and save your business money.
3. By spreading the risk you can reduce the impact to your business of volatility in the market.
4. By purchasing direct from the wholesale market you are able to influence the largest component of your energy costs – 70% of your final bill price is for energy generation.
5. A managed energy contract alongside energy reduction measures will improve efficiency within your business and help drive down costs.

For further advice on energy management, flexible contracts and energy reduction contact Orchard Energy on 0844 581 0844.