Monthly update on wholesale electricity and gas. Prices recently continued to fall, but beginning of April shows a slight uplift. The slight increase is due to unscheduled maintenance in a Norwegian gas field and slightly lower temperatures forecast in short term. Interesting note on increasing contribution from renewable sources.

1. WWW.EXPENSE-REDUCTION.CO.UK
Energy Market Report
April 2017
Whilst every reasonable care is taken in the compilation of the information contained within this document, any opinions expressed, errors or omissions are not the responsibility of the publisher.
> News
UK energy prices continued their downward trajectory throughout March as milder weather and strong electricity
and gas imports dampened wholesale prices and supressed demand for heating. The UK benefitted from a large
number of LNG cargo arrivals with more on the horizon for early April. Gas prices fell 4% to 1.48 p/kWh whilst
electricity prices eased off 3% to 4.33 p/kWh. The struggling oil price fell during the month as the growth in US
crude inventories trumped the reduction in output from OPEC countries. Brent crude closed the month at $52.83/
bbl having touched the $50.00 mark in mid month.
The OPEC agreement to curb output is
currently only scheduled to last until 30 June
2017 but there is speculation that members
may agree to extend the deal to reduce the
global glut. Much will depend upon Russia’s
position on an extension. Libyan production was
disrupted towards the end of March but was
quickly restored and the country now hopes to
expand daily output from 660,000 bpd to 1.1
million bpd by the latter half of the year.
For the time being the UK gas supply situation
looks stable with strong supplies from Norway,
however the balance could be tipped if planned
LNG arrivals do not materialise and if there are
any further restrictions placed on the Rough gas
storage facility; currently restricting injections
until 30 June. If this is extended, then the
annual seasonal task of filling the available
storage in the summer months becomes more
of a challenge and a potential bullish price
driver.
Electricity prices again mirrored movements in
the gas market but saw prices rise right at the
end of the month as oil prices ticked up and
strikes in France raised questions over nuclear
availability over the summer months. A tight
supply situation in Europe could mean calls for
higher electricity exports from the UK.
On the supply side, a new 880MW Carrington
gas fired power station was officially opening in
Greater Manchester. This is the first new large
scale gas plant to be connected to the National
Grid since 2013. It is said to be both highly
efficient and also highly flexible, being able
to provide a rapid source of back-up power to
supplement intermittent power sources such as
wind and solar.
The gradual transition toward renewable
energy reached a new milestone during March
when power produced from solar outweighed
required demand from traditional sources
(nuclear, gas and coal). Due to bright sunny
weather across most of the UK between 1 and
4 pm on Saturday 25th March, demand for
power was lower than the overnight demand
for the first time in UK history. This was due
to the amount of electricity generated by
solar installations across the country. In total
solar PV contributed 15% of the country’s total
electricity generation.