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UK gas prices posted modest gains during November. Gas prices rose 1.0% to 1.27 p/kWh reflecting colder tempature forecasts, as well as below normal wind and hydro generation. There were no significant maintenance outages from gas pipelines connecting the UK with the Netherlands and Norway. High numbers of LNG deliveries and gas storage levels also capped gains.
Power prices recorded larger gains, rising 2.9% to 4.65 p/kWh, as a surge in carbon prices increased the cost of burning fossil fuels for power generation. Meanwhile, colder weather over the next 2-3 months is likely to boost energy demand.
Carbon recorded a 18.7% increase in European prices to €28.13/tCO2, as the UK and EU have only a few issues to resolve on a trade deal after 1 Jan 2021. Meanwhile, the UK Government’s Covid-19 restrictions introduce a new tier system starting from 2 Dec, although some increased contact is permitted from 23-27 Dec. Brent crude oil prices moved 28.6% higher during November to $48.18/bbl after OPEC+ agreed to extend production cuts.
Gas prices are still attractive for clients with 1 April 2021 renewals. While electricity prices are already at a premium, last month’s gains means there is only 1-2 weeks to secure open contracts this month before suppliers slow down for the winter holidays.
For businesses not renewing until early-2021, action must be taken immediately to lock in contracts while energy prices remain low. If your contracts aren’t renewing until Oct-2021, there may be another opportunity during summer 2021.
Coronavirus (Covid-19): The Government implemented a new tier system of restrictions from 2 December to combat Covid-19.
Information on the new national restrictions, including what they mean for working from home and business closures, why they are being instroduced and the financial support available: https://www.gov.uk/guidance/local-restriction-tiers-what-you-need-to-know.
Please be aware of government guidance regarding Covid-19:
– stay at home as much as possible
– work from home if you can
– limit contact with other people
– keep your distance if you go out (2 metres apart where possible)
– wash your hands regularly
Please contact your Beond Account Manager if you have any questions.
Business customers to cover cost of RO Mutualisation for third year: For the third year in a row, mutualisation of Renewables Obligations (RO) has been triggered according to Ofgem. A number of smaller suppliers failed to make their 2019-20 RO payments by the late payment deadline of 31 October 2020, leading to a “relevant shortfall” in the clean energy support mechanism.
UK set to ban sale of new petrol and diesel cars from 2030: Prime Minister Boris Johnson is expected to announce that the sale of new petrol and diesel cars will be banned by 2030 as part of a broader package of green initiatives.
October 2020 records highest electricity switching rate since April 2019: October 2020 recorded 621,000 changes of supplier completed. This is 4% more than October 2019 as well as a 20% increase on September 2020. The report shows cumulative electricity changes of supplier for this year are currently at 5.1 million, 3% less than the same ten-month period last year.
Disclaimer: These views and recommendations are offered for your consideration and Beond makes every effort to ensure that the data and information in this report is accurate. However, due to the volatile and unpredictable nature of the energy markets, Beond cannot guarantee the accuracy of both the information and the recommendations provided. Beond does not accept any responsibility for errors or misstatements, or for any direct, indirect, consequential or other loss arising from any use of this information and/or further communication in relation to this information.
