Energy market analysis March 2019
Why gas prices are falling, the UK’s plans to reduce our carbon footprint and the impact of cooler temperatures on power prices.
Although no one is able to forecast the price movements of the future, we can look at the key issues affecting the energy world and what to keep an eye on. The outcomes of these issues will dictate the price of energy.
So, here are this month’s energy market highlights.
Gas storage levels are high and driving down gas prices
The more concentration of gas available in storage facilities, the more there is to compensate for demand across Europe. This means prices tend to drop when gas storage levels are high.
In the last few months, gas storage levels have been healthy which has driven down gas prices. This has helped prevent the usual price hikes that come with colder weather, which is great news if your contracts are up for renewal soon.
Other market news
The impact of US sanctions on Iran power prices
To push Iran to negotiate its nuclear plans, US sanctions have applied on Iranian exports. This is causing the exportation of oil from Iran to drop by nearly half and if applied strictly, could force exports to drop close to zero.
Unless Iran gets around these sanctions, energy prices are likely to rise.
One-third of the UK’s electricity to be powered by wind by 2030
BEIS recently published the Offshore Wind Sector Deal, announcing that one-third of the UK’s electricity will be produced by wind power by 2030. Not only will this deal help to reduce our carbon footprint, but it will also lift some strain on power production and create thousands of jobs. This is great news for our economy.
UK plans to reduce our carbon footprint by 2020
With UK carbon emissions falling for six years straight, we’ve gone through the longest set of reductions on record. This is down to the country using less energy and burning less coal. Although this trend has remained strong, the reduction in carbon emissions last year was the smallest amount in the six-year series. So, we all need to help continue this trend by introducing energy-saving, such as conducting an energy audit.
The impact of cooler temperatures on energy prices
Cooler temperatures tend to cause prices to rise, as the demand for energy increases. Although temperatures are currently low, healthy gas storage levels mean gas prices are not currently rising as they normally would in this season.