Business Energy News - April 2015

Our pick of the most relevant energy political and market news items, updated every month.

Wind turbine - E.ON

Top energy headlines 

Business leaders back low-carbon Energy Union

22 companies tell heads of state to back plans showing "Europe is serious about securing and decarbonising its energy supplies". (  Read full story

UK drafts CfD second chapter 

The UK government has published a schedule for the second round of the Contracts for Difference support regime that will culminate in awards by 29 March 2016. ( Read Full Story

Three things we learnt from Policy Exchange’s big energy debate

This week, in the final throes of the current parliamentary term, Policy Exchange held an event considering the role of the state in UK's energy market. At the event we heard from a cast of speakers including Ed Davey MP, Caroline Flint MP, Professor Dieter Helm, Michael Leibreich, Professor Stephen Littlechild, and Rupert Darwall. (  Read full story

How the internet of things is slashing energy costs for business. 

A worldwide network of objects already helps businesses to control energy use, but now there’s money to be made by bringing them together.  ( Read full story

After oil, a glut of natural gas may be next to flood energy markets

Liquefied natural gas is likely to be the next energy source that will see prices fall in the way oil has. ( Read Full Story

Market update

gas price chart - E.ON

Market summary for March:

Gas: A mixed month saw prices outturn slightly up on last month.

Power: The power market continued to mimic the movements in gas.

Oil: Supply continues to outweigh demand keeping prices down.

Carbon: Speculation saw prices fluctuate throughout the month.

For a detailed look at the energy markets for the past month, download our full report today (1.7MB).

E.ON Updates

We've produced more videos this month to provide a better understanding of our relationship with our customers. Our latest topics include an overview of how we work with large energy users, as well as how to choose products and services.


Political briefing

Energy and Climate Change Select Committee publish report on EMR

The Energy and Climate Change Committee’s report into the Implementation of Electricity Market Reform has some praise for the way the Government has managed the process.  However, the Committee feel that DECC is still failing to ensure that demand-side response measures have a level playing field in the Capacity Market.

Tim Yeo MP, Chair of the Energy & Climate Change Select Committee said:

“Every consumer in the country is currently subsidising spare electricity generating capacity that may only be used for a few hours each year. But smart technology has now made it possible to reduce unnecessary electricity demand at peak times, thereby reducing the number of polluting power stations that need to be switched on. This could mean we can reduce the total electricity generating capacity that has to be maintained in future, bringing down costs for consumers while enabling us to reduce consumption of fossil fuels.”

To avoid paying for carbon-intensive generation capacity that may not be needed in the future, the Committee says the Government should consider increasing the contract length of DSR capacity agreements. The MPs also raise concerns about National Grid's potential conflict of interest in its role overseeing the Capacity Market as the main Delivery Body for the Government’s Electricity Market Reforms. Given its existing role as the System Operator and owner of the transmission network it has a commercial incentive to procure additional capacity when it recommends how much capacity the Secretary of State should procure.

Small players and community energy projects, who may have more limited resources than larger counterparts, are potentially disadvantaged by the complexity of the process in awarding long-term contracts to supply low-carbon electricity.

The Committee feel that DECC’s upcoming review on EMR should focus on the issues voiced by stakeholders and raised in the Committee’s report. In particular, it should focus on:

  • The role of highly polluting coal and diesel fired power generation in the capacity market
  • How to facilitate cheaper and cleaner demand-side solutions to keep the lights on
  • How potential conflicts of interest with National Grid will be avoided or addressed
  • How engagement with small players can be improved