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Market Drivers – January

We understand the business energy market can be challenging.

Our specialists compile a Market Drivers report each month.

We have highlighted Bearish drivers, expected to contribute to the market lowering, and Bullish drivers, expected to contribute to the market going higher.

    Bearish Drivers

  • Potential increase of non-committed cargoes to NEW considering Panama Canal waiting times reduced, healthy Asian stock, and arbitrage of US cargo to Asia closed.
  • Potential for Gazprom to buy more capacity daily basis.
  • Norwegian and UK producers to continue maximizing supply.
  • The latest EC45 indicates close to normal weather.
    Bullish Drivers

  • NWE storage inventory to end Jan-22 acutely low.
  • Risk for colder weather than is outlined by the latest forecast.
  • Geopolitical concerns ramping up, opposition to NS2 growing, and leading to a strong likelihood that NS2 will not start in H1-2022.
  • Reduced French nuclear capacity availability and a risk for this to extend and lift gas for power demand.
  • Low monthly capacity booking for January via Russian supply routes.
  • We understand the business energy market can be challenging.

    Our specialists compile a Market Drivers report each month.

    We have highlighted Bearish drivers, expected to contribute to the market lowering, and Bullish drivers, expected to contribute to the market going higher.

      Bearish Drivers

    • Nord Stream 2 updates, namely the resumption of the certification process providing the NS2 AG project developer sets up a German subsidiary that is compliant with German law.
    • Gas for power demand is softer in both UK and NWE due to demand destruction caused by COVID and elevated wholesale prices.
    • Potential increase of non-committed cargoes to NEW considering Panama Canal waiting times and rising freight costs. The current high price may take some price sensitive buyers out of the market. An improving hydro balance in Brazil could see some diversions, one cargo has already diverted from Brazil to the UK.
      Bullish Drivers

    • Heavily reduced Russian supply and uncertainty to continue into Dec with no capacity booked at Mallnow. DA booking and DEC monthly auctions will influence sentiment.
    • Geopolitical concerns ramping up, opposition to NS2 growing, and the suspension of the certification process exacerbated supply worries.
    • NWE storage inventory remains at record low levels.
    • Stronger heating demand as we move into the cold period of winter, rising COVID restrictions can exacerbate LDZ demand as the number of those working from home increases.
    • Slower LNG send out compared to this month as Asian demand remains strong and we enter the peak winter period.
    • Due to the current challenges the business energy sector is facing, businesses are trying to save costs whenever possible. We have compiled some of our best energy saving tips because the cheapest unit of energy is the one you don’t use.

      Lighting Saving Tips

      • Replacing light bulbs with more eco-friendly and efficient ones.

      • Where possible, any lighting renovation should start by using daylighting as much as possible and reducing electric lighting accordingly.

      • Update lighting with certified CFL and LED bulbs.

      • Installation of occupancy sensors. Occupancy sensors can detect motion , switching off lights in unoccupied areas and turning them back on when movement is detected. Occupancy sensors save energy and help to reduce maintenance costs. Heating &

      Cooling Tips

      • Ensure your boiler is regularly serviced and tuned.

      • Seal cracks around windows and doors.

      • Check the insulation on hot and cold pipework and valve flanges.

      • Regularly check and change your air filter. A system that works correctly will not waste energy trying to cool or heat.

      • Tune up your HVAC equipment yearly. Just like a tune-up for your car can improve your gas mileage, a yearly tune-up of your heating and cooling system can improve efficiency and comfort.

      Behavioural Tips

      • The behaviour of employees is one of the most common reasons a client will receive our site consumption alerts.

      • Managing behaviour before, during and after opening times can save energy across a range of areas.

      • Create start up and shutdown schedules.

      • Ensure all areas of your business communicate to identify potential energy saving opportunities such as changing customer numbers or reduced equipment requirements.

      • Make sure to submit regular meter readings to ensure you are being billed correctly.

      • Adjust open and close schedules in line with the clocks going back this month.

      You will have seen news coverage about the energy crisis.

      Planet First Energy specialists have compiled a useful guide to help your business navigate the challenging energy market.

      Reasons for energy price rises

      This surge in prices has been driven by many different factors.

      Firstly, lifting of Covid 19 restrictions has led to countries beginning to return to a more “normal” usage pattern.

      This increase in demand has resulted in record low gas storage levels.

      Last year, the UK experienced a particularly cold winter, resulting in storage levels being depleted.

      Cooler temperatures in Asia also led to higher competition for LNG (Liquefied Natural Gas). LNG cargoes usually help support UK storage supply.

      European gas storage has not yet been replenished. The storage level for Europe is just 76%. There is hope on the horizon.

      Nord Stream 2, a new gas pipeline running from Russia to Germany has finally reached completion. Commissioning of the pipeline is currently underway. Once complete, the pipeline will have a capacity of 55 billion cubic meters of gas per year.

      Russia is now meeting contracted commitments (via Gazprom) to deliver gas to Europe, but are refusing to supply extra gas, preferring to focus on their domestic demand.

      In addition to gas supply concerns, there are also issues with electricity supply, following a recent fire at the electricity interconnector with France, and lower than expected generation from renewables.

      This has led to the UK generating more power from gas-fired power stations, and because gas prices are high, the cost of electricity is driven up.

      The future of energy prices

      At this moment, we can’t be certain if energy prices could rise further, or if renewed confidence in supply will allow prices to return to more familiar levels.

      We are seeing energy suppliers closing, as they are having to purchase energy at significantly higher prices than can be passed to residential customers, due to the price cap.

      We expect to see more suppliers fail if wholesale prices aren’t reduced.

      If your supplier does cease trading, there is no risk to supply, as OFGEM will appoint a new supplier.

      For businesses, there is no price cap, so suppliers can pass on the full increase in wholesale energy prices.

      Suppliers are making very high contract offers.

      We are also seeing suppliers not pricing at all, or withdrawing prices very quickly, due to market volatility.

      Any questions? Request a complimentary call with our business energy specialists.

      How to reduce the impact of rising energy prices on your business



      Your options will depend on when your current supply contract ends and your individual circumstances.

      However, our business energy specialists have compiled recommendations, to help your businesses navigate the energy crisis.

      • Ensure you are providing meter reads so you are only billed for actual consumption

      • If you are struggling to pay invoices it’s vital you communicate with your supplier, at the earliest opportunity, as they may offer payment options

      • Develop an energy reduction strategy

      • Explore options for self-generating energy

      We’re pleased to announce our partnership with specialist recovery audit consultancy, Meridian Cost Benefit. We will be helping Meridian meet their long-term environmental and community goals.

       

      Meridian Logo

       

      Planet First Energy will provide a range of energy services including procurement of renewable energy, energy management, and emissions reduction to support the reporting and delivery demands of voluntary Carbon Disclosure Projects and Government legislation.

      As commercial organisations, we both embrace our part in driving the transition to a zero carbon economy but Meridian have gone further and recognised they have an opportunity to progress social change.

      PFE’s social and environmental objectives are to tackle fuel poverty, support the development of energy efficiency projects in the domestic sector and support the delivery of renewable energy technologies.

      Steve Silverwood, Managing Director of Planet First Energy said: “We are enormously proud of our partnership with Meridian. As a social enterprise, being able to support companies transform the way they procure and manage energy to support the transition to a low carbon economy while supporting communities and agencies to reduce fuel poverty in some of the UK’s poorest households is a really exciting and positive step for all of us.”

      “Great partnerships are based on shared values. Planet First are committed to supporting communities and the environment. Together we can help clients on their journey to become carbon neutral.” Said Peter Welch, MD of Meridian Cost Benefit.

      Leading construction, property services and development company Wates Group is the first in the sector to have supported the creation of an independent Social Enterprise.
       
      Wates has appointed Planet First Energy to help it reduce CO2 emissions, and meet long-term sustainability goals.
       
      Planet First Energy will provide a range of energy services including procurement of renewable energy, energy management, and emissions reporting.
       
      Planet First was born out of a collaborative partnership between Wates and its single energy provider – ECA Business Energy, to support the reporting and delivery demands of voluntary Carbon Disclosure Projects and Government legislation.
       
      John Dunne, Group Director for Wates’ sustainability programmes, explained:
       
      “Since 2016 we have increased the procurement of renewable energy by 70%, and this partnership will support our goal to achieve 100% of our electricity supplies from renewable sources by 2025, while providing a substantial investment to the Social Enterprise sector which is relevant to the construction industry.
       
      “As a business we are wholly committed to achieving zero carbon in our operations, and creating social value through the development of the social enterprise sector. Our partnership with Planet First Energy supports these sustainability goals and the interests of our business from a commercial, social, and environmental perspective.”
       
      Planet First social and environmental objectives are to tackle fuel poverty, support the delivery of energy efficiency projects in the domestic sector, and support the development of renewable energy technologies.
       
      Steve Silverwood, Managing Director of Planet First Energy said:
       
      “In partnership with Wates, we are committed to transforming the way the business procures and consumes energy, to support the transition to a low carbon economy.
       
      “ As a social enterprise, Planet First also gives back to our communities, by providing support to fuel poor households.
       
      “We are enormously proud of our partnership with Wates”.

      A leading energy advice centre will continue supporting energy poor households, thanks to a unique partnership with Planet First Energy.

      South Yorkshire Energy Centre, located at Heeley City Farm in Sheffield, help domestic customers in fuel poor households access energy cost and consumption education and resources.

      The aim is to share knowledge of energy reduction steps, and renewable energy resources, to reduce energy usage and costs.

      Planet First Energy will provide the Energy Centre with significant funding and volunteer support. Energy specialists from Planet First Energy have committed to volunteer at the Centre.

      A new Energy Centre brand has been developed, and prominent signage is to be installed at the Centre, to prom0te the partnership.

      Steve Silverwood, Managing Director of Planet First Energy, said: “We are committed to help reduce energy consumption, and improve access to renewable energy. South Yorkshire Energy Centre share our values.

      “Our partnership with the Centre ensures continuation of their invaluable work in our community. We look forward to helping to deliver exciting new initiatives in the future.”

      For more information about South Yorkshire Energy Centre click here.

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