Energy & Carbon Management newsletter - April 2012
2
utility management electricity gas water We know energy. Telephone 01293 651218 Email [email protected] Website www.energyandcarbonmanagement.com Energy and Carbon Management Limited Longley House, International Drive, Crawley, West Sussex, RH10 6AQ © 2012 Energy and Carbon Management Limited Energy Newsletter / April 2012 Page 1 of 2 Welcome to Energy & Carbon Management’s Newsletter MARKET BRIEF As we moved towards the end of April a short period of continued downside movement on price was halted as the market rebounded. This was partly due to traders and participants re-entering the market at a lower value and economic data confirming that the UK had slipped back in to recession. Britain’s economy slid into its second recession since the financial crisis after official data unexpectedly showed a fall in output in the first three months of 2012, piling pressure on Prime Minister David Cameron’s embattled coalition government. Even as other currencies get a boost from the good news out of the United States, the sterling is being left out of the party. Concerns about the British economy are on the rise as GDP shows a contraction in Quarter 1 of 2012. The news is disappointing, and it is dragging on the pound. Reasons for optimism • A weak pound made British products cheaper, helping exporters. • A powerful stock market rally boosted confidence • Unemployment rises have been smaller than forecast. • Markets have welcomed Coalition efforts to tackle the deficit. Reasons for pessimism • The Government has embarked on savage public spending cuts that will dent demand. • The QE impact is unknown. It could stoke inflation, forcing rate rises to control it. • British house prices remain over-valued. • Western governments and consumers have built up colossal debts that could take more than a decade to clear. • Western economies face a demographic timebomb which could erode the wealth of nations for a generation. ANNUAL REVIEW The annual review shows Electricity, Gas and Oil each lower than where they were at this time last year. The annual comparison shows Electricity is positioned nearly 12% lower than it was at this time last year, with Gas over 4% and Oil nearly 7% lower. When looking at the historic position of the markets in the last 5 years we have seen annualised increases representing more than 100% increases in a 12 month period against 50% pull-backs. PRICES COMPARED TO THIS TIME LAST YEAR. GAS ELECTRICITY ANNUAL REVIEW Electricity (£ MW) £57.38 £50.68 Gas (ppTh) 68.40p 65.475p Oil ($ Brl) $112.76 $104.93 27/04/11 27/04/12 OIL - 4.27% - 11.67% - 6.94% PRICES COMPARED TO THIS TIME LAST MONTH. GAS ELECTRICITY MONTHLY REVIEW Electricity (£ MW) £50.73 £50.68 Gas (ppTh) 68.50p 65.475p Oil ($ Brl) $107.33 $104.93 27/03/12 27/04/12 Gas -4.41% - 0.09% -2.23%
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Transcript of Energy & Carbon Management newsletter - April 2012
utility management electricity gas waterWe know energy.
Telephone 01293 651218 Email [email protected] Website www.energyandcarbonmanagement.comEnergy and Carbon Management Limited Longley House, International Drive, Crawley, West Sussex, RH10 6AQ © 2012 Energy and Carbon Management Limited
Energy Newsletter / April 2012Page 1 of 2Welcome to Energy & Carbon
Management’s NewsletterMARKET BRIEF
As we moved towards the end of April a short period of continued downside movement on price was halted as the market rebounded. This was partly due to traders and participants re-entering the market at a lower value and economic data confirming that the UK had slipped back in to recession.
Britain’s economy slid into its second recession since the financial crisis after official data unexpectedly showed a fall in output in the first three months of 2012, piling pressure on Prime Minister David Cameron’s embattled coalition government.
Even as other currencies get a boost from the good news out of the United States, the sterling is being left out of the party. Concerns about the British economy are on the rise as GDP shows a contraction in Quarter 1 of 2012. The news is disappointing, and it is dragging on the pound.
Reasons for optimism• A weak pound made British products cheaper, helping exporters. • A powerful stock market rally boosted confidence• Unemployment rises have been smaller than forecast. • Markets have welcomed Coalition efforts to tackle the deficit.
Reasons for pessimism• The Government has embarked on savage public spending
cuts that will dent demand. • The QE impact is unknown. It could stoke inflation, forcing
rate rises to control it. • British house prices remain over-valued. • Western governments and consumers have built up colossal
debts that could take more than a decade to clear. • Western economies face a demographic timebomb which
could erode the wealth of nations for a generation. ANNUAL REVIEW
The annual review shows Electricity, Gas and Oil each lower than where they were at this time last year. The annual comparison shows Electricity is positioned nearly 12% lower than it was at this time last year, with Gas over 4% and Oil nearly 7% lower.
When looking at the historic position of the markets in the last 5 years we have seen annualised increases representing more than 100% increases in a 12 month period against 50% pull-backs.
PRICEs CoMPAREd To ThIs TIME LAsT yEAR.
GASELECTRICITY
ANNUAL REVIEW
Electricity (£ MW) £57.38 £50.68
Gas (ppTh) 68.40p 65.475p
oil ($ Brl) $112.76 $104.93
27/04
/11
27/04
/12
OIL
- 4.27%- 11.67% - 6.94%
PRICEs CoMPAREd To ThIs TIME LAsT MoNTh.
GASELECTRICITY
MoNThLy REVIEW
Electricity (£ MW) £50.73 £50.68
Gas (ppTh) 68.50p 65.475p
oil ($ Brl) $107.33 $104.93
27/03
/12
27/04
/12
Gas
-4.41%- 0.09% -2.23%
utility management electricity gas waterWe know energy.
Telephone 01293 651218 Email [email protected] Website www.energyandcarbonmanagement.comEnergy and Carbon Management Limited Longley House, International Drive, Crawley, West Sussex, RH10 6AQ © 2012 Energy and Carbon Management Limited
QUEsTIoNs? CoNTACT Us TodAy
Telephone01293 651218
Websitewww.energyandcarbonmanagement.com
Fax01293 512030
MoNThLy REVIEW
In contrast to last months review which showed each commodity up on their comparative monthly reviews this month details all three commodities are sitting lower than they were at this time a month ago.
Outlook currently remains bearish. On the supply side, news that the German wind generation is high added to the current comfort, a fall in anticipated UK demand levels on the back of public holidays in May and June provide future downside potential.
Prices found bearish sentiment beyond the forward months amid weakening Oil prices.
oThER MARKET NEWs
Clean Energy Ministerial (CEM) MeetingThis month speaking at the Clean Energy Ministerial (CEM) meeting in London Prime Minister David Cameron has said “Renewables can be one of the cheapest forms of energy within years, provided they become economically self sustaining, truly global and receive continued research support. He is sticking to his vow to lead the “greenest government ever”.
“There are huge challenges facing governments across the world today, and one of the most important of all is how we meet our growing energy demands” Cameron said.
“We urgently need a more diverse, cleaner mix of energy sources that will give us security without causing irreparable damage to the planet”.
Mr Cameron insisted that the UK was now “one of the best place in the world” for green investment and green jobs, with the City of London “number one” for investors in low-carbon energy.
Recession risks delaying low-carbon investments – energy ministerAusterity measures threaten to delay the uptake of low-carbon technologies as state budget cuts have resulted in the lowest clean energy investments in three years, said the UK’s Energy Secretary last Wednesday.
“The risk is that recession delays low-carbon investment, leaving us a high-carbon legacy even when the global economy recovers,” Edward Davey said addressing energy ministers from 23 countries at the opening of a two-day clean energy summit in London, the day figures also showed Britain itself had slipped back into recession.
Global clean energy investments reached a record high of $263 billion (163 billion pounds) in 2011, but in the first quarter 2012 figures showed investor appetite for the sector fell to the lowest since 2009 to $27 billion (16 billion pounds) with developers spooked by government uncertainty.
Davey urged governments to create the right frameworks for low-carbon investment to encourage private financing as states do not have the balance sheet to fully support clean energy growth.
“The threat of an investment squeeze makes our task more urgent, not less,” Davey said.
Britain itself is in the process of reforming its Electricity market to encourage more low-carbon power generation, such as from renewable energy sources or power plants fitted with carbon-capture and storage (CCS) technology.
Energy Newsletter / April 2012Page 2 of 2
