Business energy news - June 2016

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

Top energy headlines 

CO2 turned into stone in Iceland in climate change breakthrough

Radical new technique promises a cheaper and more secure method of burying CO2 emissions underground instead of storing it as a gas. (theguardian.com)
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Solar reaches new milestone over coal generation

The UK solar industry has reached its latest milestone after generating more energy in a full month than coal for the first time, according to analysis by Carbon Brief. (solarpowerportal.co.uk)
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Government could ditch pledge to shut all coal-fired power stations by 2025

The Independent can reveal the Government is considering allowing coal-fired power stations to continue to operate providing they can reduce their emissions using fledgling carbon capture and storage (CCS) technology. (independent.co.uk)
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Oil demand to peak in 2030 as energy experts slash forecasts

Global oil demand could  peak by the end of the next decade even as global economic growth climbs. (telegraph.co.uk)
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Global clean energy employment rose 5% in 2015, figures show

More than 8 million people were employed worldwide in the renewable energy sector last year as rapidly falling costs drove growth in the industry. (theguardian.com)
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E.ON Updates

Changes to third party costs

DUoS charges
Following a recent change to the Distribution Network Operators' (DNOs) licence conditions, the networks now have to give customers and suppliers 15 months' notice of final Distribution Use of System (DUoS) charges, instead of just 40 days' notice.

The change meant that the networks published two sets of final charges in December 2015, covering both April 2016 to March 2017 and April 2017 to March 2018. Effectively, this has 'fixed' charges for the next two years, with the aim of helping customers plan ahead and manage their energy costs more effectively.

TNUoS charges
For some time, our forecasts for Transmission Network Use of System (TNUoS) charges have taken into account the closure of Longannet in Fife, one of Europe's largest coal-fired power stations.

In February 2016, National Grid published its final TNUoS charges for April 2016 to March 2017 and, as we predicted, Longannet's closure in March 2016 has had a big impact (especially in Scottish and Northern regions). It means that National Grid loses out on revenue from generators, which it then has to recover from the demand side — from customers — increasing TNUoS charges.

It isn't good news, but our forecasts can help give you advance warning of the increase and the chance to plan ahead.

To find out more, just contact your Account Manager, call us on 02476 42 42 42 or email retail.sales@eonenergy.com..  


Market update

 

Market summary for May 2016

Gas: Wholesale gas prices continued to move higher.

Power: Power prices follow the price of fuels.

Oil: Oil prices rose 12% in May.

Carbon: European Carbon prices unchanged. 

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

  



Political briefing

Energy and Climate Change select committee hold session on EU referendum

Parliament  - Energy News - E.ON

The Energy and Climate Change Select Committee held a session this week on the EU referendum and energy policy. They heard from Antony Froggatt from Chatham House, Michael Grubb from University College London and Tony Lodge from the Centre for Policy Studies.

Professor Grubb said that leaving the European Union would damage investor confidence in UK renewables. He said the leaders of the Leave campaign are “hostile” to renewable energy and the sector would be further damaged if the UK votes to leave the EU on 23 June.

Grubb added there was little advantage in the UK negotiating an independent energy trade deal given its integration with EU gas and power networks. “The UK would be in a weak negotiating position as we are a net energy importer,” he said.

The Centre for Policy Studies’ political and energy analyst Tony Lodge said the Climate Change Act, Carbon Price Floor and carbon budgets showed the UK is a low-carbon leader but said that being part of the EU is holding it back. He said: “These are domestic policies which have seen the UK leading on decarbonisation without the need for EU directives to push it along. That is something that the UK can be proud about.”

Lodge added the 12.4GW of coal and oil plant closed by the EU’s Large Combustion Plant Directive and 11GW expected to close by 2021 under the Industrial Emissions Directive had “destabilised” UK energy policy.

Chatham House energy research fellow Antony Froggatt said it was uncertain whether leaving the EU would necessarily result in the UK ditching the IED and LCPD. Froggatt said post-Brexit priorities would be in other areas such as finance and migration and it could be several years before the UK could overturn these directives, if ever.