Energy price update

Energy price update 2017 Q2: Uncertainty for energy prices

There is continued uncertainty for energy prices over the repairs needed to return the Rough storage facility to full operation. We note the factors that are affecting gas and electricity production in our quarterly energy price update.

Continued outages at the Rough storage facility – initially reported in Q1 update – are now planned to continue until April 2018. The UK’s largest natural gas storage site will still be able to withdraw gas, but gas injection has been halted until next year. We rely on stored gas to cope with high demand in winter and to ensure continued supply. The closure is expected to lead to an increase in gas prices long-term.

Cool temperatures are still placing demand on gas for heating. Looking ahead to the summer, solar power generation is expected to pick up and increase electricity generated from renewables. However, wind generation is expected to fall.

Electricity supply is still being squeezed across Europe. Prices were affect by the Syrian air strike, but they have since stabilised.

And long-term, there is continued uncertainty over oil prices.

 

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