Connect with us

Hi, what are you looking for?

Editor’s Pick

Wholesale energy prices hit second highest level in at least three years

Wholesale energy prices hit the second highest level in at least three years on Monday, adding pressure on suppliers struggling to secure electricity and gas at competitive rates.

Low wind speeds were to blame for pushing wholesale energy prices for the peak period between 5pm and 6pm over GBP2,000 per megawatt hour, only the second time they have surpassed this level since 2018.

The UK’s power grid was forced to turn to gas-fired power plants and coal to make up for the lack of wind power generation, a problem that has exacerbated the energy price crisis that started in August.

The price surge on Monday was still below the levels reached in mid-September, when they hit GBP2,500 per MWh. The record wholesale prices have forced almost 20 energy suppliers to go bust since the start of September, , with more failures expected in the coming weeks.

“The very high wholesale prices have caused significant distress even before winter begins,” said Anna Moss, head of consumer markets at Cornwall Insight, which compiled the data. “How suppliers fare is in the hands of wholesale trading parties, and how suppliers can manage their costs through the winter months ahead.”

On Monday, gas-fired power plants were producing nearly 55% of electricity needs, up from a more typical level of 40%, while the rapidly disappearing coal sector accounted for about 3%.

Wind farms accounted for just 4%, a fraction of the average of 21% supplied over the last year, according to data from the Drax Electric Insights website.

In August, National Grid, which manages the UK’s electricity grid, was forced to break a 55-day coal-free power generation streak as the summer heatwave becalmed wind turbines. It was forced to turn to coal stations, the last of which the government has said it intends to close by the end of September 2024, to plug the power generation shortfall from wind turbines.

Demand for energy has rocketed as economies reopen following the coronavirus pandemic, with wholesale prices also under pressure due to lower supplies from Russia to western Europe.

While natural gas prices have climbed steeply, the UK’s price cap on energy bills stops companies from immediately passing those costs on to their customers.

Last month, Cornwall Insight released a report estimating that energy bills could rise by as much as 30% from 1 April, when industry regulator Ofgem is set to raise the price cap to contain the crisis engulfing suppliers.

Read more:
Wholesale energy prices hit second highest level in at least three years

Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

News

A worker of Ayala Corp’s Integrated Micro-Electronics Inc. (IMI) solders an automotive computer component part at an electronics assembly line in Binan, Laguna south...

News

MARI GIMENEZ-UNSPLASH THE NATIONAL Government plans to borrow P200 billion from the domestic market in July, the Bureau of the Treasury (BTr) said on...

News

SCOTT GRAHAM-UNSPLASH PHILIPPINE PRESIDENT Rodrigo R. Duterte has signed an order updating the list of investment areas where foreign ownership is limited or barred....

News

ETIENNE GIRARDET-UNSPLASH WHOLESALE PRICES of building materials in Metro Manila jumped to their highest in more than a decade in May as construction activities...

News

MAYNILAD Water Services, Inc. targets to distribute starting in July up to 10 million liters per day (MLD) of its “new water” or treated...

News

SOLAR Philippines Power Project Holdings, Inc. was able to forge contracts for at least 60% of the 10 gigawatts (GW) of energy capacity that...

You May Also Like

News

BW FILE PHOTO GROSS BORROWINGS by the National Government reached P2.6 trillion as of end-September as it continued to raise funds to respond to...

News

REUTERS By Luz Wendy T. Noble, Reporter The country’s foreign exchange buffers slightly increased as of end-October as the value of the central bank’s...

News

COVID-19 has had a significant impact on the mental health of Filipinos across different groups all over the archipelago. From frontline workers, parents balancing...

Financial Advisors

The healthcare ecosystem is one that has thrived on the cusp of scientific progress, benefitting enormously from the winds of change in the technological...

Disclaimer: Respect Investment.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2022 Respect Investment. All Rights Reserved.