On Wednesday 6th October, wholesale gas prices reached new all-time highs. Ongoing volatility has been seen across the UK and European gas and power markets with month ahead prices reaching record highs resulting in 9p/kWh increase in a single day. Pricing then dropped in the afternoon causing supplier contract offers to be pulled to allow the market to settle. Due to the ongoing volatility, suppliers are struggling to price.
Most periods past Winter ’21 are less inflated which is believed to be as a result of tumbling carbon prices following intervention by the European Commission and lesser concern over demand. These are being closely monitored to aid future procurement activity. However, rates continue at record highs with the market in a state of flux.
To provide reassurances to end users following the recent collapse of suppliers (primarily across the domestic market) due to the steep increases in Winter ’21 prices, Ofgem has advised: ‘Ofgem and government prepare for a wide range of scenarios and have long-standing contingency plans in place for any situation as needed.’ This reportedly includes appointing a consultancy firm to explore the options available.
With recent concerns over UK energy supplies, Boris Johnson has pledged as part of the Conservative Party Conference to continue investment into renewable energy projects and more nuclear to aid with meeting the UK’s climate commitments and aiding security of supply.
At Carbonxgen we are working with all of our clients, where action is required, to ensure all options are considered and recommendations of next steps are made. If you need more information or would like the support of our expert procurement team please get in touch.