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Outlook - April 2015
Two items we want to cover in the newsletter this month are the continuing delay by the Irish dept
of Communications, Energy and Natural Resources in giving clarity on the new ESOS regulations and
a new initiative by SmartPower that will help firms stay with the most competitive energy prices
going forward.
ESOS regulations per our previous newsletters - This EU directive obliges companies with annual
turnover of more than 50 million or more than 250 employees to undertake an energy audit by the
5th December 2015 or face stiff penalties. We have guidelines of how this will work in the UK see
http://www.legislation.gov.uk/uksi/2014/1643/contents/made but little so far from the relevant
Irish government dept. Our information is that more info will be available by the end of April. This is
important as each member state does have some flexibility in the interpretation of the regulations
and we want to see how different the Irish regulations are compared to the UK.
Understandably one question that we are frequently asked is -'we are set up a small company but
part of a corporate group so do we come under ESOS?'. Well as we don't have the update for the
Irish regulations we don't know for sure but in the UK if a corporate group contains at least one ESOS
qualifying large organisation in the UK, all UK orgs of that group will also fall under ESOS irrespective
of their size. So if your company is part of a larger group you may be hit by these new requirements.
If you are preparing for the audit an important point to note is that the audits must be carried out by
a qualified person who is listed on a register such as the UK AEE ESOS Register. (SmartPower is on
the UK Register).
SmartPower Procurement Group Staying on top of ever changing gas & electricity prices is not easy
for most firms. To add to that supplier quotes are often supplied in a way that hide mark up and
make it difficult to compare 'like with like' quotes. Joining the SmartPower procurement group
solves this problem as we use our inside knowledge of industry pricing practises to negotiate
cheaper electricity and gas prices and constantly monitor market developments to ensure that you
always get the most competitive price in the market. We advise you of opportunities to save money
by switching suppliers or changing tariffs as market conditions develop. This allows firms to relax
knowing that an expert is watching the market and ensuring you are getting the best prices for your
energy spend on an ongoing basis. Contact us for more details by simply replying to this email.
Energy Markets Outlook
Gas prices have been quite volatile over the past month swinging lower during early March then
higher again during the latter half. Oil prices have also been v volatile and rose by about 10% as a
result of Saudi Arabian tensions with Yemen but prices are now been knocked back by news of a
potential US Iran nuclear deal. This could potentially lead to a doubling of Iranian oil exports.
Storage issues (following the long Winter) in the UK are helping to push Irish gas prices higher right
now. The operator of the Rough facility off the coast of Yorkshire has announced it discovered
technical problems that might force capacity at the site to be reduced by 30%. This is a big deal since
the Rough facility accounts for 70% of UK gas storage space. UK storage sites are now less than 19%
full.

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The UK government has also announced a new North Sea tax regime reducing taxes which could
boost UK gas and oil production by 15% over the next five years.
Natural Gas
Reduced LNG imports and on-going maintenance issues in Norway fields also helped push gas prices
higher in the last two weeks. However, we are not expecting these price drivers to last as the Rough
facility capacity cutback could be fixed within the next six month (depending on testing) and LNG
imports into the UK are expected to pick up as a maintenance shutdown at Qatar's Ras Laffan LNG
terminal has ended.
Our advice is to sit tight on floating contracts (gas & electricity) for the time being. In our view, the
prices that we have seen lately are overly pessimistic particularly considering the ramping up of
Qatari LNG.

3. Irish Electricity
Despite UK gas ranging upwards over the past two weeks, Electr
a combination of the recent (in our view temporary) reversals in fortunes for the Euro and the large
amount of wind generation in March. Electricity prices are to some extent easier to predict than gas
as there is an artificial floor level around 4p/kWh (ie 4p sterling per kilowatt hour) which we saw
emerging very strongly in 2009 and to a lesser extend occasionally during the past months. (Where
possible) we look to lock in electricity price contracts on price dips tow
Despite UK gas ranging upwards over the past two weeks, Electricity prices remain weak, this is due
a combination of the recent (in our view temporary) reversals in fortunes for the Euro and the large
amount of wind generation in March. Electricity prices are to some extent easier to predict than gas
rtificial floor level around 4p/kWh (ie 4p sterling per kilowatt hour) which we saw
emerging very strongly in 2009 and to a lesser extend occasionally during the past months. (Where
possible) we look to lock in electricity price contracts on price dips towards the floor.
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icity prices remain weak, this is due
a combination of the recent (in our view temporary) reversals in fortunes for the Euro and the large
amount of wind generation in March. Electricity prices are to some extent easier to predict than gas
rtificial floor level around 4p/kWh (ie 4p sterling per kilowatt hour) which we saw
emerging very strongly in 2009 and to a lesser extend occasionally during the past months. (Where
ards the floor.

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Currency Outlook
EURGBP prices where lower in early March and have rallied since then. On longer term timescales,
we are sticking with the weak euro theme. Lower against sterling and parity with the dollar are real
possibilities.
About SmartPower
Our range of activities include;
Review current contracts to make sure your business is tied into the lowest cost connection level
agreement.
Making comparisons between tracker and fixed electricity tariffs more transparent, so better
procurement decisions are made.
Providing daily/hour gas price updates on the forward markets, so that gas & electricity prices can be
hedged forward at competitive rates.
Scheduling load to use lowest priced times and switch off non-critical load during high cost periods.
Allowing a (non-critical) portion of the electricity profile to be switched off or an on-site generator
started remotely by the National Grid (via an aggregator known as a Demand Side Unit) allowing you
to receive capacity payments in compensation. This is also applicable to sites with a Diesel
Generator.

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Providing an independent expert review and paybacks of energy saving capital projects, including
wind turbines, led lighting retrofits and solar photovoltaic panels.
For CHP owners, access market information to optimise run hours so that power is imported
(purchased) when the import cost is lower than the running costs of the generator, and if there is an
export potential, then better returns can be invariably be obtained using a time of day tariff model.
See www.smartpower.ie for more details. If you have any questions please contact me at
peter.brennan@SmartPower.ie or on 086 8402190. Naturally, please feel free to forward on the
newsletter to anybody who has an interest.