When is the right time to secure your energy 2023 - Flipbook - Page 7
Why are wholesale energy prices volatile?
2020-2021
The COVID-19 pandemic slows investment
in new oil and gas development, spurred
by reduced demand and crashing global oil
April - June 2021
prices. A colder-than-average winter in 2021
During this period, low wind speeds across
also led to an increase in energy demand.
Europe affect the UK’s proportion of wind
generation which created a drop in renewable
September 2021
electricity production.
The huge gas price increase forces some
UK energy suppliers to go out of business.
By the end of 2021, 28 energy companies
October 2021
close their doors, affecting over 2 million
A fire at the IFA1 interconnector – a highvoltage cable used to import electricity
customers. Gas prices in the UK more
than quadrupled during this period and in
from France – causes a full outage. Capacity
September, gas prices increased by 70%.
reduces, and the interconnector is expected
to function at a reduced capacity until late
2022.
February 2022
The conflict between Russia and Ukraine
April 2022
causes further difficulties with the UK’s
The EU introduced regulations that required
energy supply. Although the UK does not
all member states to fill at least 80% of their
directly import its gas from Russia, many
storage capacity by November 2022. This is
countries reduce or end their gas imports
intended as a safeguard to ensure countries
from the latter, causing a scarcity of
have gas reserves to support winter
available gas as a result.
2022/23. This contributes to market volatility
for the remainder of 2022.
June 2022
Russia reduces natural gas flows through
August 2022
Nord Stream, with supply running at 40%
France is the largest exporter of electricity to
capacity in June 2022. Flow is reduced
Europe. Some French reactors were offline
further in July, before being shut down fully
during 2022 due to maintenance causing
in August.
prices to rise in 2022.
January 2023
October 2022
At the start of the year, the government
The government launches the Energy Bill
announced the Energy Bill Discount Scheme
Relief Scheme (EBRS) to support businesses
(EBDS) as scaled-back energy support for
with their energy bills. This provided
non-domestic customers from April 2023 to
discounted energy rates for businesses for
March 2024.
six months from 1 October 2022 to 31 March
2023.
May 2023
Prices dropped in 2023 when some reactors
April 2023
came back online but if they go offline again,
Recent updates confirm that this is when all
we can expect to see prices begin to rise
reforms will start. All TNUoS charges will
again.
increase.
Low wind generation and a reduction in electricity supply from France are two of the many influencing factors that have caused
instability in the energy market between 2020 and 2023. All these factors continue to be unstable and could influence future price hikes.
Secure your business energy prices now and protect your business against future price rises.
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