Business energy news - April 2016

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

Parliament  - Energy News - E.ON


Top energy headlines 

UK will have too much electricity this summer, National Grid forecasts

Britain will have too much electricity this summer due to the growth in wind and solar farms, National Grid has forecast, warning it could be forced to issue unprecedented emergency orders to power plants to switch off.(Telegraph) Read full story

Rapid decline of coal use leads to drop in UK emissions

Figures show a 4% reduction in the national annual emissions of carbon dioxide, with coal now burning at its lowest level in at least 150 years
( Read more

Scotland generated more than half its electricity from renewables last year

Country beats its 50 percent green energy target for 2015. ( Read more

Government's plan for secure power generation 'unfit for purpose': report

Capacity Market scheme accused of making consumers pay conflicting subsidies for highly polluting plants ( Read more

Market update

 Commodity prices graph March 2016 - E.ON

Market summary for March 2016:

Gas: Stable fundamentals and normal weather offer little direction.

Power: Tighter capacity margins and rising coal price see prices firm.

Oil: Oil gains on signs of demand recovering and production cuts in the US.

Carbon: Carbon trades sideways and lacks clear direction.

For a detailed look at the energy markets for the past month, download the full report here (1.8MB).

E.ON Updates

man and woman in office reading a doc - E.ONMaking the most of your Energy Saving Opportunity Scheme (ESOS) audit

If you’ve had an ESOS audit done we’ll work through the detail with you at no additional cost, to help you find ways to improve your site’s efficiency. We can do this even if we didn’t complete your audit ourselves.

Together with our energy efficiency partners, we'll find ways your business could implement efficiency recommendations to potentially reduce running costs. Find out more

Political briefing

CMA makes recommendations

The Competition and Markets Authority (CMA) has published a summary of its provisional decision on its investigation into the energy market, CMA logo - E.ONwhich sets out a “comprehensive and wide-ranging package of remedies to address the problems hindering competition.” The CMA is proposing to introduce these measures following the conclusion of its investigation in June. Key proposals contained in the report include:

•    An Ofgem-controlled database which will allow rival suppliers to contact domestic and microbusiness customers who have been stuck on their supplier’s default tariff for 3 years or more with better deals

•    A transitional price control – ‘price cap’ – for the 4 million households who are on prepayment meters

•    Strengthening the ability and incentives for third party intermediaries such as price comparison websites (PCWs) to help customers find better deals by giving them access to relevant information like customer meter numbers and allowing them to negotiate exclusive deals with suppliers.

•    Removing the 4 tariff rule which limits competition and innovation. This will enable suppliers and PCWs to offer tariffs designed for certain customer groups.

•    Helping microbusinesses through improved price transparency, tackling ‘rollover’ contracts with greater notice periods and ending termination fees which prevent switching as well as moves to prompt and engage.

•    Ensuring that the Contracts for Difference process where the government supports investment in low carbon generation is carried out transparently so that the impact on customer bills is assessed beforehand.

•    Introducing a locational pricing system for transmission losses incurred when transporting electricity

Political reactions to the recommendations focussed on the role of large energy suppliers and the extent to which consumers had lost out financially in recent years. In a rare show of unity, both the Government and Opposition condemned large energy suppliers and called for more power for customers.

Energy and Climate Change Secretary Amber Rudd said: “This is a wakeup call to the Big Six. Energy customers should get a fair deal from a market that works for them. That’s why we called for the biggest ever investigation into the energy market and won’t hesitate to take forward its recommendations. This report goes hand-in-glove with everything this Government is doing to deliver a fair, competitive energy market that puts the families and businesses paying the bills first and the power back in their hands.”

Shadow Energy and Climate Change Secretary Lisa Nandy said: “This investigation has confirmed that millions of families and businesses have been overcharged for their energy bills to the tune of billions of pounds yet energy companies are still being let off the hook…This was a critical chance to shake up a broken energy market and make sure savings from falling wholesale prices are passed on to customers.”

Consumer groups including Which? and Citizen’s Advice welcomed the proposals on pre-payment meters but noted that customers poorer households using credit meters should also be protected.