Business energy news - May 2016

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

Car factory - E.ON


Top energy headlines 

Research carried out by E.ON shows that British holiday makers are demanding more and more from their hotels

Concern for the environment plays big a part in Britons' hotel bookings, with research showing one in five are more likely to stay somewhere if it uses renewable energy sources ( Read full story

Britain gets no power from coal for 'first time on record

Britain generated no electricity from coal on Tuesday morning for what is believed to be the first time since the 19th century, in a major milestone in the decline of the polluting power source.(Telegraph) Read full story

Dyson's electric car development could become 'the next Tesla'

Filed patents show the British engineering firm may use solid-state batteries that could stretch electric car’s range to hundreds of miles and increase safety.( Read more

UK's attractiveness for renewables investment plummets to all-time low

UK routinely topped annual league table run by Ernst & Young but has slid to 13th place due to government’s ‘non-committal approach’
( Read more

RHI applications from businesses up 10% in 2016

The number of businesses that applied to join the government scheme which provides support for low carbon heating increased by 10% in Q1 2016 compared to Q4 2015. ( Read more

E.ON Updates

Long-term relationships key for business energy cost security: E.ON UK CEO

Manufacturers and energy companies need to form longer-term strategic relationships in order to overcome, and profit from, changes in world Tony Cocker at conference - E.ONmarkets and the development of new technology. That was the message from E.ON UK CEO Tony Cocker addressing the CBI’s manufacturing conference at Warwick University.

Speaking to Midlands business owners, Tony Cocker said manufacturers had the opportunity to take advantage of new technologies and solutions in the energy market to secure their energy supplies, reduce their overall costs and perhaps begin to profit from generating power from the grid or becoming more versatile in reducing consumption at times of peak demand.

He said: “Your world is changing. Energy is changing. We have to adapt. We see the energy world transforming as a result of customer trends and technology and we are investing in growing our capabilities to compete in that new energy world. But what does that mean for business, for manufacturing? It means we are interested in providing solutions and new ways of working.

Earn money and reduce your energy costs

“Our ambition is to partner with business to provide opportunities to help understand, control and manage the cost of energy use over the long term. The focus needs to be on managing overall costs rather than the more simple pence-per-unit of energy supply.

“For example, look at the efficiency of your buildings and plant, your energy management systems. If you have capacity at your sites we can help you to maximise that – it might be generation or ‘turn down’ capability. These things might be a peripheral issue for your company but they can earn money and reduce your energy costs”.

Following the conference, Tony Cocker commented on new figures from the Government’s Energy Savings Opportunities Scheme (ESOS) which show more than 3,000 of the 10,000 qualifying firms have yet to report on their energy data, leaving themselves open to a potential maximum fine of £50,000 for non-compliance.

Tony Cocker speaking at conference - E.ONThe Government estimates that a 5% reduction in energy use would result in £250m of savings across British industry. Allied to that, Carbon Trust figures show an average potential saving of 20% on their energy costs.

“There is obvious and significant benefit to British businesses in carrying out ESOS audits and pushing forward with recommendations,” added Tony Cocker, “whether that is energy efficiency measures, better management of sites or even more future-looking solutions such as demand side response or virtual power plants. E.ON customers who have started down that road are already seeing significant cost reductions and improvements in energy security.”

Business customers including Marks & Spencer, and manufacturers Goglio and Reckitt Benckiser – for whom E.ON built and operates on-site combined heat and power units – have seen significant reductions in energy costs by entering into long term agreements on energy management and self-generation.

For more information and to get some help with understanding and acting on your business’s ESOS to improve your bottom line visit our energy solutions page

Market update

 May_market_report_graph - E.ON

Market summary for April 2016:

Gas: A confluence of drivers pushes the prices up.

Power: Bullishness in the gas market pushes power contracts higher.

Oil: Oil gains on signs of demand recovering and production issues.

Carbon: Carbon trades 40% up.

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

Political briefing

Government announce Capacity Market reforms

The Government have announced reforms to the Capacity Market following a consultation launched in March. DECC said they were taking DECC logo - E.ONaction to ensure the UK’s long-term energy security as it builds a system of energy infrastructure fit for the 21st century.

DECC said that responses to the March consultation reflected clear support from industry and investors for three key reforms which will ensure the Capacity Market continues to deliver energy security:

•    Buying more electricity and buying it earlier;

•    Toughening sanctions for firms which go back on their Capacity Market agreements;

•    Bringing forward the Capacity Market by one year to the winter of 2017/2018.

The Government has set out its intention to hold an auction this winter for delivery in 2017/2018 and will proceed with its other core proposals in the consultation, giving both bill-payers and the energy industry more certainty for the coming winters.

Lisa Nandy MP, Labour's Shadow Energy & Climate Change Secretary said that the announcement would put up to £38 on the average household energy bill. She said that “every family's energy bill is to shoot up to pay for these gross new handouts to the big energy companies” and that the Capacity Market is “so badly designed it isn't getting new power stations built but instead is just lining the pockets of the Big Six and investors in highly-polluting diesel generators.”