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Energy Prices (early April 2014)

Early April 2014

Electricity:   The CMA (UK competition authority) has announced they will launch the first full scale anti-trust investigation in to UK power. This is likely to discourage investment in new capacity until the two year investigation is completed, with effects extending out in to the next ten years.

A new report from the national grid suggests that doubling the UK interconnector capacity to 8GW could reduce power prices by up to 10%.

Gas: Prices are likely to rebound soon, following a large market sell-off that drove prices down sharply in the last two weeks.

Russia’s continuing manoeuvres in Ukraine have promoted efforts to diversify gas supplies away from Russian Gas, Russia currently supplies around 1/3 of the EU’s gas needs. However, little of this reaches UK shores.

LNG supply to the UK has increased following a drop in Asian demand, with more carges expected in the next week.

Summary position:

Oil $107.61/barrel

Coal $88.75/MT

EUA 14 €5.10/TCO2

Gas 59.05/th Oct 14

Gas 60.5/th Apr 15

Electricity £49.43/MWh Oct 14

Electricity £52.2/MWh Apr 15