Business Energy Market Update: November 2024

In October wholesale prices rose steeply for near term delivery and both the spot price and November contracts for delivery rose in tandem across gas and electricity at a rate of roughly 10%.

Further out, the market was much more stable with gains of just a few percentage points for 2025 deliveries and no change for deliveries in 2026 compared with the start of the month.

Low wind output and an outage in the Sleipner Gas field-mid month did much to support prices, as did continuing tensions in the Middle East. Not even the level of aggregated EU gas storage facilities sitting at 95.31% full could do anything to dampen the bull run. This is admittedly around 3.5 percentage points below the same date last year (98.66%) but still slightly above the average for this date over the prior 5 years (92.47%) so disappointing, nonetheless.

Industry News

In August OFGEM finally published their summary of responses to their ‘Standing Charges call for input’, a survey conducted at the end of last year as a result of significant consumer backlash to recent increases in Standing Charges. It comes as no surprise that the overwhelming response was that standing charges were too high and that they hurt lower energy consumers the most. 60% of domestic users surveyed called for them to be abolished completely whilst there was a more moderated response from the commercial sector with many business owners and stakeholders surveyed calling for cap on costs in line with inflation.

Across the board though, the sentiment was very much that the charges were unfair and an urgent review is needed.

Despite the overwhelmingly negative response from consumers for the increase in fixed costs, some stakeholders elsewhere in the industry do support the current charging arrangements though. Consequently, OFGEM have stated they “will continue to review the evidence gathered and follow up with stakeholders where appropriate as we consider next steps for future price”. This lukewarm response was to be expected and OFGEM will publish a further paper at an as yet unspecified date once further research has been conducted.

As always, the team at Clear Utility Solutions is on hand to help with any utility related queries you may have so please get in touch on 01327601122 or email hello@clearutilitysolutions.com