Power and gas prices for May released

The power and gas prices for May 2023 have been released

Healthy storage levels weighed on seasonal gas contracts

The Winter’23 contract moved 24% lower throughout May after making a strong downwards move in the last week of the month. The contract broke below the March lows and traded at the lowest price seen since January 2022, before the Russian invasion of Ukraine and the resulting concerns over gas supply.

The contract was weighed on by healthy storage levels across the UK and Europe and reports that storage levels are on track to reach the 90% fill target well before the start of the withdrawal season. After slow injections in April, the rate of injections picked up in the first half of May but remained below the 5-year average due to the significant drive for injections into storage at this time last year.

The prospect of higher capacity at Rough also weighed on prices after Centrica announced that they intend to increase capacity at the site by 20% by the start of the Winter 2023-2024.

Power prices moved lower overall in May.

Despite an increase in gas for power demand amid lower wind speeds, UK power prices ended the month lower overall. An additional bank holiday in May led to power demand falling to its lowest level since May 2020.

Meanwhile, a favourable gas storage dynamic for this time of year and above average temperatures, eased concerns over winter supply levels. Mid-month, an additional 1.2GW of nuclear supply returned to the UK market in line with the end of maintenance at 2 Sizewell facilities.

In the same week, French nuclear availability was declared “stable” at 65%. As a result, the Winter’23 contract dropped to the lowest level since March. However, safety checks across the entirety of the French nuclear fleet proceeded to keep the market cautious and limited any further downward price movement.

ESOS: less than six months to comply.

The final deadline to complete and submit your compliant ESOS reporting for Phase 3 is 5 December 2023, but some organisations run the risk of underestimating the time required to undertake the required audit and complete the report; and are also seemingly oblivious to the scarcity of appropriately qualified lead assessor resource to carry out and oversee your energy audits and overall ESOS assessment.

A false sense of security now and lack of action in committing to a qualified ESOS partner now could cause a significant headache later. Find out more about ESOS here.

British Industry Supercharger: consultation on capacity market exemption and government response to the 2022 review of the energy intensive industries exemption scheme

Addressing 2 of the 3 elements of the package of measures announced as part of the British Industry Supercharger (BIS) for Energy Intensive Industries (EIIs). The consultation seeks feedback on the delivery of an exemption from Capacity Market charges for EIIs and provides the government’s response to the consultation on the EII Exemption Scheme carried out in 2022. The EII Network Charging Cost Compensation Scheme will be the subject of a future consultation which will be published in June 2023.