Power and gas rise despite scorching summer
During 2012 annual power and gas prices fell by around 10% from March to July. But , despite a warmer summer, power and gas prices have decreased by only 3% during the same period this year. Indeed the significantly improved weather during July should have helped to keep a lid on power and gas prices. But a number of factors have pushed up the gas and power markets. Month-ahead Brent crude rose 4% to a monthly average of $107.1/bl following an increase in demand in the US and rising tensions in Egypt.
Further concerns about supply in the UK were raised by the release of Ofgem’s Electricity Capacity Assessment, which said the surplus generation capacity in the UK could fall to only 2% by 2015-16.
LNG supply to the UK has dried up over the summer with only a few tankers reaching our shores. This has been compounded by a number of outages at North Sea gas fields. Annual October 13 gas rose 1.1% to 68.5p/th and annual October 13 baseload power increased 0.6% to £52.0/MWh.