Up a canal without a paddle?

Business consumers renewing electricity supply contracts in the last few months will have been shocked by the increase in the market.  We covered the multiple reasons for this in a previous news item and whilst the oil price has dropped in the last day or so due to global economic growth worries, prices are still high.

So is this a temporary blip or must we expect soaring electric bills as part of our future?

Electricity and its consumption will certainly have a greater presence in our everyday lives. It is predicted that by 2030 the vast majority of existing combustion engine car journeys will have been replaced, at least in built up areas, by autonomous electric vehicles which will of course require re-charging.  Even on holiday we will travel the canals of Amsterdam on electric boats from 2025 and fly there on short haul electric aircraft by 2030.

So how will all the electricity be generated if we are to avoid a global warming catastrophe and will electricity continue to rise in cost?

Well neccessity being the mother of invention, the answer will probably be in improved battery technology which will not only allow those canal boats and aircraft to ply their trade but will also allow green generation technologioes such as solar and wind to store their generated power when conditions are favourable.

The Tesla Gigafactory in Nevada, which provides improved economies of scale and will drive down the cost of battery technology, will certainly not be the last of its kind and will provide the future paddles to get us along those canals.




Launch an energy company or repair the roads?

Will local councillors find this item increasingly under AOB on their meeting agendas?

With cuts in funding from central government leading to cuts in services to maintain their statutory core services, it is understandable that Local Autorities are seeking alternative sources of revenue.  But is an energy supply company a viable option?

It is a crowded market place with over 80 suppliers vying for business.  What will be the USP that will convince consumers to buy local?  Ultimately it seems that price is still the decider as Bristol City Council chose British Gas for their last contract over their own company Bristol Energy on the basis of cost.

Breaking into the big six market share requires a lot of investment and nerve and doesn't appear to be a guarantee of early returns. Portsmouth City Council have recently reversed a decision and decided against floating their own energy boat.  But it can work.

Robin Hood Energy owned by Nottingham City Council have returned an operating surplus in their third year of trading of £ 220,000 and larger returns may follow, but for now they have a green socially responsible model which is washing its face in terms of funding and ploughing its profits back into the local community.

So no highway robbery in Nottingham.

Definitely more Robin Hood than Dick Turpin.


How SMART do you have to be?

Energy UK , the trade body for the industry and the Departmement for Business Energy and Industrial Strategy came out with a joint defence of smart metering last week, quoting various statistics about the roll out, take up and interchangeability of meters with suppliers.

Well we all know what Mark Twain thought of statistics, "lies damn lies and ......",  but the fact is that despite the inevitable chaos in any UK organisational initiative (who mentioned train time tables), the fact is that smart metering is coming, is here to stay and is a GOOD THING.

Enabling the generatiors to accurately predict consumption and ultimately achieve an e-grid where production of electricity and demand can be accurately matched, will make the grid more efficient to the benefit of all.

As far as reducing consumption is concerned, that is very much up to the individual household or business. Glancing at a tell tale meter on the wall of the kitchen might well get the odd light turned off at the domestic level but the real gains will be made by businesses who embrace their consumption data and act upon it.

The smart meter roll out may not have been a model of efficiency to date, but there are savings to be had and as Mark Twain also said: "Continuous improvement is better than delayed perfection".


Has stable pricing deserted us for ever?

The recent movements in forward electricity baseload pricing including the May and July camel humps illustrate only too well that energy markets remain violatile and any vision of the future is probably a mirage.

Fine weather should bring more solar energy but the prolonged high over the UK reduces wind generation while at the same time more and more air conditioners are turned on thereby increasing demand. Other factors include the oil price which is affected by political uncertainty and unplanned outages at nuclear plants.

Risk managment is key in these times, so contact ESS for advice on how to navigate these financial quicksands.





Are cracks appearing in our generation capability?

News that cracks have been found in the graphite core of Huntersdon B nuclear reactor in Ayrshire is bad news for EDF who will lose a possible £ 120 m of revenue while checks are carried out. They will also be hoping that  Hinckley Point B gets a clean bill of health when checks currently underway are completed, particularly as EDF are now ramping up construction of Hinckley C.

These cracks are expected over time and were found as part of routine inspections so there are no immediate safety concerns but, leaving aside the financial worries for EDF, what are the implications for the UK? 

Well nuclear provides only 20% of our generation capacity at the moment and that will continue to diminish, but we are not ready to take up the slack yet in our generation mix as coal is also being phased out to meet carbon emission targets. 

It may mean that we have to increase and therefore incentivise more rapid renewables growth and we all know where the funding for that will fall.

The bank holiday will have helped boost solar generation but probably at the expense of wind as a huge high sat over the country. 

It is a complex generation web and we will need to fill all these cracks one way or another.

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