Oil firm Total this week claim to have stemmed the leak of gas from their Elgin platform in the North Sea. The technique used (carried out almost 2 months after the leak was identified) involved dumping heavy mud directly onto the leak and has so far been successful – a similar process was attempted on the Deep Water Horizon oil rig last year, but was a failure in that instance – the estimated volume of lost gas from the Elgin platform was touted as being 7 million cubic feet per day.

A revised energy draft bill has been published by the Department of Energy and Climate Change (DECC ) this week that looks to reform parts of the energy industry as a way to help limit future increases in energy costs and to secure lower carbon energy, although some critics have stated that the result could actually be higher energy bills.
With £110 billion in investments required to replace the generating capacity due for closure over the next ten years (estimated at one-fifth of current capacity) and to upgrade the grid by 2020 – the draft bill includes provisions for:

• Contracts for Difference (CfD) – long term instruments to provide stable and predictable incentives for companies to invest in low-carbon generation;
• Investment Instruments – long-term instruments to enable early investment in advance of the CfD regime coming into force;
• Capacity Market – to ensure the security of electricity supply;
• Conflicts of Interest and Contingency Arrangements – to ensure the institution which will deliver these schemes is fit for purpose;
• Renewables Transitional – transition arrangements for investments under the renewables obligation scheme, and
• Emissions Performance Standard – to limit carbon dioxide emissions from new fossil fuel power stations.

The full document can be viewed here.

A key aim of the bill is to limit generation from the most polluting sources of energy in favour of new natural gas, nuclear and renewable energy generation and is likely to help the UK hit renewable targets. Many of the ‘new’ provisions may look familiar to anybody who has viewed any previous DECC incentives, but as a long-term plan, it is unclear how these steps will actually benefit the industry and/or end users at the moment. We shall endeavour to keep our clients updated on any developments that may affect them.

EDF Energy is in talks with the Office for Nuclear Regulation with a proposal to extend the working life of their eight UK-based nuclear power stations beyond the decommissioning programme starting in 2016 with Sizewell being the last due to go offline after 2023. EDF is due to make a final investment decision on the UK’s first two new nuclear reactors at Hinkley Point at the end this year. There is no legislation that states the reactors cannot continue to generate clean energy beyond these dates provided safety standards are met, but the costs to run these generators increase as the stations age and naturally profits will fall With npower RWE and Eon shelving plans to build new nuclear, the lifespan extension of this existing fleet would be welcome news indeed.

A recent poll has found that the majority of UK consumers have moved gas and electricity suppliers in the last five years. Following much publicised price hikes, and politicians actively encouraging people to ensure they’re on the best energy deals, some 72% of end-users have made the switch.
In the commercial and industrial sector this is something we’re very aware of as many clients new to our Utility Bureau Service have been with the same supplier for many years – in some cases since the deregulation of the energy markets in 2000! This is not the best way to ensure you’re getting the best prices available.
With in-depth supplier knowledge and contacts, we are able to review your energy contracts and look to secure absolute best prices for you, which will relieve you of the stress and time involved in arranging new contracts. We have also been very successful in arranging backdated contracts with incumbent suppliers where we discover that historic costs levied aren’t just or fair. All as part of our Utility Bureau Service – get in touch today to see how we can help streamline your business energy needs and save you money and time.  

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Clifford Talbot Partnership identified a potential saving for one of our customers in the order of £9,596 per annum resulting from being charged the incorrect available capacity.  Part of the UBS service procedure for new account setup includes confirmation of agreed capacity with the local distribution company and resolving where this has not been billed correctly by supplier.  As these types of billing errors can remain undetected for many years the potential savings can be substantial – in a similar situation with another customer £42k worth of savings were recouped from a supplier for incorrect capacity over a 6 year duration.

Another major supplier laid its cards on the table on Monday – Eon said that it would not increase energy tariffs for UK residential customers this year.  Last week British Gas advised that rises would add another £50 to the average home’s bills.  Most suppliers decreased their tariffs in January following the decrease in the markets during the latter part of 2011.  Consumer Focus was concerned that customers would not understand if they were getting a fair deal and that “The perception is that suppliers are quick to pass on high price rises and slow to pass on small price cuts”.

The Telegraphs reporter Christopher Booker article “Keeping the country short of water is now Government and EU policy” suggested a “great water shambles”. The combination of companies failure to repair leaks, plus a 10% increase in population in the 20 years since privatisation with little increase in reservoir capacity will make water an even more precious resource.    He states this is now deliberate policy following a European Commission communication in 2007, which solely relies on increasing water efficiency and reducing the use of water, not least by making it more expensive.  This is somewhat frustrating since the Telegraph had reported last week that half the water companies in England and Wales will not be required to reduce leakages before 2015 and that Thames Water lost the equivalent of 25.7% of supply in leaks in 2010/2011.

Clifford Talbot Partnership has been contacted by a new supplier that is entering the market in July 2012 called Hudson Energy.  Hudson claim to be one of the largest and fastest growing businesses to business suppliers of electricity and natural gas in North America and are expanding into the UK market place.  However, seems like their intention is to only deal with third party intermediaries and to quote via a web portal, which is a different approach compared to the other suppliers on our tender lists.  We will remain in contact with this new supplier, review their terms and conditions and assess their suitability as a supplier to be added to our tender lists in future.

Don’t forget to keep up-to-date on wholesale energy market prices by clicking here and to subscribe to our regular news updates to ensure you’re as well informed as possible when it comes time to look at your Business Energy Procurement; something our team of Expert Energy Consultants and Utility Consultants can advise you on – get in touch for more details.

Following the March 2011 tsunami and earthquake that caused the Fukushima nuclear power plant to meltdown, the final generator at Hokkaido is now fully offline. As all of Japan’s 50 nuclear power plants are now offline a supply gap will be seen during a forecast hot summer where air conditioning demand is at a peak. Over 10% of Japan’s total power is typically generated through nuclear, so LNG imports are expected to help plug this gap. This could well be at the cost of LNG deliveries being diverted from the UK, among other countries – fortunately, our dependence on LNG has not reached a point where such a small volume diversion is expected to have large market repercussions.

Swedish company Vattenfall are to create a massive onshore wind farm in Wales, it has been announced. Large enough to power 206,000 homes via 76 turbines, and at a cost of just £300m, this wind farm would be the biggest in the UK, and is expected to be feeding some 300MW into the gird within four years.
Although wind and solar power installations are surging forward, there could well be a more reliable and regular source of renewable power in tidal power generation. The wind doesn’t always blow, and the sun doesn’t always shine, but there will always be tides (to varying degrees of course). Unfortunately, the cost of installing tidal energy generators has always been significantly higher than on-shore generation (including ‘hydro’ energy which is typically generated using water flows through dams), and so many would-be investors are turned off owing to the relatively small returns. Hopefully as technology improves this will change, and the largely untapped source will become a major player in the push toward renewable energy generation.  As reported in January, recent developments in wave power generation should also help in the drive for renewables, with the Searaser (using technology whereby the seawater is ‘pumped’ to an onshore power station as opposed to the generation taking place offshore) likely to be operational in 2014, and hopefully inspiring other such installations.

Centrica Upstream (part of Centrica) have announced that they are finally producing gas from the Ensign platform (situated in the Southern North Sea off Norfolk) after the discovery of gas there in 1986. This has been a notoriously difficult project which has required pioneering new drilling technology to be developed in order to extract the gas – exact volumes are yet to be determined, but it’s certainly good news for UK supply.

A large part of energy users final costs are made up of Transmission and Distribution charges (commonly referred to as TuoS & DuoS): when combined, these charges generally account for around a third of the delivered cost of energy. It has been expected that these ‘pass-through’ charges – which are reviewed twice-yearly – are set to increase by 11% (and by as much as 27% in more remote areas of the UK) by 2020, but the biggest single rise could be seen long before then as network companies look to carry out substantial improvements to the distribution network. We will keep you up to date on any significant developments related to this via our news feeds and through regular contact with our clients.

Being experts in Energy Procurement we are of course keeping track of events and possible revelations which may impact on prices and influence our well-judged recommendations for our clients as part of our Utility Bureau Services. Get in touch using the details here and see just how having a professional Utilities Consultant can benefit your business energy needs and beyond.

Centrica has successfully expanded its business by purchasing over $1.5bn of Norwegian assets from Statoil Petroleum AS. More than six months of negotiations were needed to reach an agreement which will see the addition of some 12m barrels of oil per annum to the already enviable Centrica portfolio. Based entirely around North Sea oil fields, the weight of Centrica behind the production and development of oil and natural gas assets in the area will further bolster future supply capacity.  With the recent closure of South Morecambe Field, and the Rough Storage facility switching to export mode (although storage here is much higher than seasonal norms), the additional oil and natural gas will be more than welcome.

Shell have struck a blow to the UK’s drive to increase renewable energy by ruling themselves out as a potential investor in huge off-shore wind farms based in the North Sea. Despite owing on-shore wind farms in the US (with almost 1GW of capacity), the energy giant have declared themselves out owing to the small financial incentives offered by renewable energy when, Shell claims, there are many other energy technologies in existence that offer better profit margins.  Staying with renewable energy, and US scientists are looking to further the efficiency of transparent photovoltaic cells – which typically create only 20% of the energy generated by traditional solar panels – through the wonders of nanotechnology, meaning that completely clear windows can be used to generate electricity.  The technology could be used in car windows, unlike the current PV panels, and would charge the power cells in the car. Unfortunately, nanotechnology is a slow developing and expensive process and so no mass-market, game-changing energy source is to be expected from this for at least another 20 years.

Don’t forget to keep up-to-date on wholesale energy market prices by clicking here and to subscribe to our regular news updates to ensure you’re as well informed as possible when it comes time to look at your Business Energy Procurement; something our team of Expert Energy Consultants and Utility Consultants can advise you on – get in touch for more details.

Eon Energy are looking to improve the SME section of its business by incentives such as pre-pay meters and ensuring brokers adhere to a code of practice set out by them. This code of practice is something which could potentially work in supplier’s favour, so our Utility Consultants will be carefully reviewing the terms and conditions on behalf of clients and will update all those affected in due course. Eon have also stated that they will no longer back-bill businesses by more than three years, with the aim being to reduce that to one year before the end of next year – this will stop the shock of being back-billed by up to six years as is the current situation and is a very positive step in reducing exposure to small business who may not have accrued for utility costs which are later levied to them.

Following recent news that GDF have completed a takeover of International Power, oil giant Shell are moving to purchase London listed Cove Energy for just over £1.1bn in an effort to increase its holding in East African gas reserves. Although the green light is still needed from the Mozambique government, it is widely expected that the sale will complete shortly, and exploration of LNG in the area will considerably increase with the muscle of Shell behind it.

Spain officially entered recession this week – bad news for the European economy in general, but with a recession typically comes a fall in the demand of energy and oil. This is then freed up to the market and therefore excess supply is created; this usually results in a falling market. Unfortunately there are bigger implications – with bail-outs and job losses hitting the wider economy – so whether or not a significant fall will be seen is not yet clear. Worth noting though is the fact that current electricity prices in Spain are among the highest in Europe and are some 10% higher than UK prices (the 2nd highest of the major European players). The inescapable fact is that the costs of production and manufacturing has been impacted by high energy rates which has led to increased overheads, reduced profits, staff cutbacks and the inevitable closure of companies where energy costs can quite easily account for more than 30% of overall outgoings. It is now more important than ever to ensure you have a professional and experienced Utility Consultancy dedicated to your accounts. In order to carry out thorough Energy Procurement exercises and achieve the lowest possible costs for your Business Energy get in touch with Clifford Talbot Partnership now and see what we can do for you.