What’s happening in the market? August Energy Market Update
The energy market is constantly changing which can be hard to keep track of. That’s where our energy experts come in. Their constant market analysis makes sure that you’re only signing contracts at the best time and prices. But what do they have to say about the recent changes in the energy market? Here’s your energy market update.
What’s happened in the energy market recently?
Recently, there’s been significant changes in the energy market and energy generation. In terms of the forward curve price action, we’re continuing to see a steady rise in prices after a short period of decline. This is likely to be due to our new need for expensive gas for fuel. There are also fears surrounding Australia’s LNG strikes. The prospects of a possible strike have caused wholesale gas prices to soar across Europe as the plants provide 10% of the world’s LNG supply.
There’s new energy generation in the mix too. For the first time in months, the UK had to rely on coal as part of its energy mix. One of our experts spotted the Ratcliffe-On-Soar coal power plant fired up again and our most recent report showed that 2% of our power generation was from coal. The power station was back up and running to fill the gap left by less production of solar and wind in order to meet demand. In a time where we’re striving for sustainability and embracing cleaner energy sources, the decision to use the power station feels like a step back.
What’s driving the energy market at the moment?
One of the key market drivers recently is storage ready for winter. Both the EU and the UK have healthy storage levels in preparation for the upcoming winter. As a comparison, storage levels have not been this high, this early on in the year for over three years. This is a great sign as we move towards the colder months.
Wind power generation is expected to fall over the next week or so which is driving the market too. With wind generation falling, we’ll have to turn to more expensive and less sustainable methods of power generation, such as gas, to meet the demand for power. This is likely to see a further increase in the price of energy.
Another key market driver is the interconnector flows from France. They continue to stay strong even through the country’s recent heatwaves. The record high temperatures have hindered France’s ability to cool down their nuclear reactors. France has now been able to overtake Sweden as Europe’s top power exporter.
What’s the latest energy market news?
UK urged to increase green fund to compete in the net zero race.
The institute for Public Policy Research (IPPR) has cautioned that the UK’s race to net zero could fall behind the US and EU unless there is a significant increase in investment in green initiatives. Their proposal suggests that the UK government should establish a “national investment fund” (NIF) that would provide the extra support green businesses need. Their funding model is based on the TV show Dragon’s Den and encourages the government to invest in more green manufacturing and renewable projects.
What role does energy play in the race to Net Zero? Click here to find out!
Ships set sail to test wind power at sea
A Cargill dry bulk ship has launched on its first voyage since being fitted with special sails. The ship aims to study how wind power can be used to cut emissions and energy usage across the shipping sector. Currently, the maritime industry is responsible for nearly 3% of global CO2 emissions. The ship will sail from Singapore to Brazil to then transport a cargo of grain to Denmark. If the study is successful, it’s likely that there could be a drop in carbon emission contracts.
Fears grow over Australia’s LNG strikes
Wholesale gas prices have risen recently due to concerns over a strike at an LNG plant in Australia. The Offshore Alliance Union warned that there could be a strike at the North West Shelf Facility from as early as September 2nd if there is no deal on pay. Two other plants, Gorgon and Wheatstone, are also voting on strike action. The three plants provide 10% of global LNG supply. These higher prices are expected to cause a significant rise in Ofgem’s price cap in January.
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