Business energy news - March 2016

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

Industrial scene at night - E.ON

Top energy headlines 

UK government moves to ease energy supply fears

Key reforms to the energy market have been unexpectedly brought forward by a year in a bid to avoid supply gaps ( Read Full Story

Commodities - Energy price war spreads to gas as US shale storms global market, stalks Russia

The US has exported its first shipment of natural gas in a historic move that shifts the balance of power in the global energy market and kicks off a struggle with Russia for market share. ( Read Full Story

UK's low-carbon energy generation soared in 2015, but so did oil production

Low-carbon energy sources rose to account for 43% of the UK's electricity supply last year, but oil production saw its first significant increase this millennium, provisional figures released yesterday (25 February) have revealed. ( Read Full Story

DECC underlines carbon-cutting objectives in new five year plan

Government publishes five year departmental plan, detailing commitments to bolster energy security, keep bills down, and deliver on decarbonisation goal The Department of Energy and Climate Change (DECC) has published its official departmental plan, confirming its priorities for the period from 2015 to 2020.( Read full story

Market update

 Feb 2016 market report commodity graph - E.ON

Market summary for February 2016:

Gas: Cold temperatures and a recovery in crude saw gas stabilise.

Power: Stabilising fuel costs feed into power prices.

Oil: A volatile month with the prospect of supply cuts challenging global oversupply.

Carbon: Carbon prices stabilise with the rest of the fuel complex, but have an ugly start to the year.

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

E.ON Updates

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Our Virtual Power Plant system brings together our customers’ energy assets, including energy consumption, generation and storage systems, into one integrated network that is monitored and optimised by our specialist Connecting Energies Team.


Compensation for the indirect costs of the Renewables Obligation and small scale Feed-in-Tariffs

The Government has introduced a new scheme to compensate eligible customers for the impact the Renewables Obligation (RO) and Feed-in Tariff (FiT) schemes has had on electricity prices.

Eligible businesses must apply for the scheme directly with the Government. If the Government receives an application from a business before 31 March 2016 they will backdate the payments to 14 December 2015. Applications received after 31 March 2016 will be valid from the start of the month they are received in.

To be eligible businesses must

•    manufacture a product in the UK within an eligible sector (PDF 745KB).
•    satisfy the business electricity intensity test.

The compensation rate

The Government will calculate the amount of compensation eligible businesses will receive; this won’t exceed 85% of the RO and FiT cost to a business. This compensation would be paid quarterly in arrears by Department for Business, Innovation and Skills (BIS).

How to get it

Businesses which think they might be eligible must complete an application form and email it to, along with any other information required.

You can find more information about the scheme, and access the application form, on the website.

Political briefing

DECC announce changes to the Capacity Market

Energy and Climate Change Secretary Amber Rudd has announced changes to the Capacity Market in a bid to shore up the UK’s energy security. Under plans announced this week, the Government intends to hold an early Capacity Auction in January 2017 for delivery in winter 2017/18. The Government hopes that holding an early Capacity Auction will mean that the UK’s energy infrastructure can be improved, with a particular view to building new gas fired plant.

Announcing the changes, Rudd said: “The Capacity Market has driven down costs and secured energy at the lowest possible price for bill-payers, but I’m taking further action to tackle the legacy of under-investment and ensure our country’s long-term energy security. By buying more capacity earlier we will protect consumers and businesses from avoidable spikes in energy costs.”

The proposed changes drew criticism from the Labour Party, with Shadow Energy Secretary Lisa Nandy saying that they represented “a panicked response that will raise energy bills and deliver a windfall to some of the biggest energy companies.” However, the CBI described the plans as “good news” and called for business and Government to work together to solve issues around energy security.