Natural gas energy 790321
Published on: Mar 3, 2016
Transcripts - Natural gas energy 790321
Tough economic forces plus lousy summerweather appear to be determined to test and takecharge of the wholesale power supply market.Prices tumbled throughout the middle of June to brand-new lows. Annual gas prices are now15% lower than the same time last year, while yearly energy costs fell to a two-year low plus are22% down year-on-year.Falling force costs dragged yearly spark spreads down 7% to £3.4/MWh, and even whichreliable stalwart coal is having a hard time of factors, with slipping prices buffering the fall ofdark spreads somewhat to a £17.9/MWh premium to spark spreads.So whats been setting off these cost crashes? Well, concerns about debt in the Eurozonecountries hasnt assisted. Greece lurches from crisis to crisis plus even the election of a freshgovernment is doing small to allay worries regarding its long-term future. However its slowingfinancial growth in the US plus China which has actually forced global energy marketsdownwards. Brent Ameratex Energy Crude Oil tumbled to $97.6/bl, its lowest level sinceJanuary 2011, and yearly API coal dropped to a unique 20-month low of $95.4/t.However, all of the is advantageous news for consumers. While we can be missing out on whichBBQ summer the forecasters promised you, both domestic and commercial end-users haveenjoyed energy costs drop in real terms. A fall in inflation has equally helped to stabilise theretail market, nevertheless the big difference has been at the pumps, where motorists havefinally started to find the numbers found on the forecourts going down rather of up. This,combined with lower electricity plus gas bills, has given the British economy a brief respite,throughout that it has a chance to drive up creation and keep the fragile heart of UK PLCbeating for a while longer.Ironically, its been the biomass market that has held the fort. Despite biomass contractsdropping, with prices for 2013 down 1% to £88.5/t, costs are still around 6% high thanthis time last year. Theyve recovered from their four-year low plus are at their highest level forfive months. This boost has been helped inside no small measure with all the approval of theplans for a 40MW staw-fuelled biomass plant inside Snetterton, Norfolk, that have finally beenprovided the go-ahead.The real headline grabber throughout June and into July has been the atrocious weather the UKhas experienced. Lower than average June temperatures and storm after storm has resultedinside a rise in UK gas demand. Supply peaked at 223.1mcm on 11th June, inside the middle ofthe bad weather. Industry watchers believe that the unseasonably bad weather has encouragednumerous folks to do something they wouldnt normally do inside June - they turned the heatingup. The outcome was that although the nationwide system decreased 0.1%, the territorialsystem climbed 2.2%. To date, summer demand (measured from April 1st) was down 7.8%found on the nationwide program however, up a staggering 31.1% on the territorial system,compared to the same time last year.
What this indicates is the fact that while gas demand for energy generation is down year-on-year, usage by households plus tiny businesses has risen. This means that gas usage is actingas a barometer for the productiveness of the UK economy plus while the big users can bestruggling, homes and businesses are continuing to ride out the worst of the economic storm,putting a more positive face on what has been a difficult few months.How costs usually fare in the next few weeks depends 3 points - the resolution (or otherwise) ofthe Eurozone crisis, and the financial condition of the US plus China. If they commence towobble you might see costs commence to climb back up again.