UK gas prices are currently amongst the lowest in Europe. Wholesale prices are highly competitive, taxes are relatively low, and for business users, at least, network costs account for a relatively low proportion of the bill. There is only one big problem – the carbon emissions from using the gas itself. (more…)
Author: Jeremy Nicholson

A Question of Balance
Why balancing the grid has been getting more expensive
There’s plenty of good news about Britain’s electricity supplies. Carbon emissions are down. Renewable generation is at record levels, wind and solar costs are falling, and wholesale prices have fallen too – at least for the time being. What’s not to like? (more…)

Don’t Delay Your CCA
Government gives green light to those eligible to save money and set course for net zero
For any business with eligible processes and plans to reduce energy or carbon emissions, applying for a Climate Change Agreement (CCA) should be a no-brainer.
The government has published its response to the consultation on an extension to the current scheme for CCAs, which relieve eligible energy-intensive users from most of the costs of the Climate Change Levy (CCL). The consultation outlined proposals to extend the scheme by two years and open it up to new entrants, allowing eligible facilities not currently participating to apply to join in 2021. The consultation received 101 responses, which fed into the final decision-making.
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All About Carbon
The surprising strength of carbon prices and their impact on the power market
Supply and demand – or not
At first glance it seems at best ironic, possibly even perverse, that carbon prices should have been so strong in recent months. After all, the COVID crisis has caused a collapse in industrial activity and power generation across Europe, reducing carbon emissions and, therefore, also the need for emitters to hold carbon allowances under the EU Emissions Trading System.
Ample supply and reduced demand hardly seem the sort of conditions to cause a surge in prices – so what has been going on?
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Oil Market Turmoil – Good or Bad News for Consumers?
The coronavirus crisis has affected all aspects of economic life but its impact on the oil and gas markets has been especially dramatic. The oil market was already on the verge of over supply before the crisis struck. Producing countries were struggling to agree production cuts even before the scale of the global economic downturn became apparent so a demand reduction of around 35% could barely have come at a more inconvenient time.

Important Note on the Yellowhammer Report
Yellowhammer – Is there really a risk of energy price increases, or is this bird a red herring?
There have been some alarming reports in the media today about the risk of significant increases in electricity prices supposedly highlighted in the government’s Yellowhammer report on no deal Brexit impacts. I believe these are the result of misunderstanding the relevant text (below).
- Demand for energy will be met and there will be no disruption to electricity or gas interconnectors. In NI there will be not be immediate disruption to electricity supply on Day 1. A rapid SEM [Single Electricity Market] split could occur months or years after EU Exit. In this event, there would not be security of supply issues. However, there will likely be significant electricity price increases for consumers (business and domestic), with associated wider economic and political impacts. Some participants could exit the market, thereby exacerbating the economic and political impacts. (BEIS)
The document refers to the risk of ‘significant increases in electricity prices’ in Northern Ireland specifically, and then only in the event of a rapid split in the all-Ireland Single Electricity Market – something both the UK and Irish governments are intent on avoiding. There would be NO material effect on the GB electricity market either way.
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