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10:30 | 17.04.2018
UK Wholesale Energy Price Rise Puts Pressure on Household Bills

LONDON, April 17, 2018 /PRNewswire/ — UK wholesale energy prices hit four-year highs on the forward products most regularly traded by energy companies during the winter, the ICIS Power Index reveals, as number of supply problems combined with the ‘Beast from the East’, increasing fundamental risk in the traded markets  Energy was being traded on the forward market in the UK at the highest prices seen for four years in the first quarter of 2018, the ICIS Power Index (IPI) reveals. (Photo: http://mma.prnewswire.com/media/619935/ICIS_Logo.jpg ) The price of gas to be delivered over the next calendar year also rose to a multi-year high, reaching its highest level since early 2015. With wholesale energy costs making up 40% of a dual fuel household bill, the price increases pile pressure on UK suppliers to raise end-user bills – if they have not done so already. The release of the figures comes just days after some high-profile suppliers increased household bills. And the pressure will be on smaller suppliers. This is because a number of small companies won over swathes of new customers by offering low tariffs underpinned by what were historically low wholesale prices from 2014 to 2016. But the recent move into a higher wholesale price range means some companies may have to revisit their approach as low tariffs may no longer be sustainable. The UK saw repeated supply and demand shocks over the winter which tested the resilience of the country’s energy infrastructure and boosted prices of electricity and gas on the wholesale market. The IPI ended Q1 2018 at just over GBP50 per megawatt-hour (MWh). This was the first time since late 2014 the GBP50/MWh ceiling had been breached. The index result compared with a low of GBP33/MWh back in early 2016 and GBP44.50/MWh going into the winter, a 12% increase in six months. “The 12% increase in forward prices over the winter was substantial,” said ICIS power markets editor Jamie Stewart. “Markets were tested by supply failures and demand shocks – not least the Beast from the East – which squeezed networks meaning a large risk premium was priced into forward products on energy markets. This led directly to the household bill increases that we have seen in recent days.” The IPI gives independent insight into wholesale power prices for both households and industrial electricity consumers, based on real market trading. The IPI is updated every working day and is freely available from the ICIS website [http://www.icis.com/energy/power/icis-power-index ], along with ICIS’ quarterly analysis of price trends and volume. About ICIS ICIS is the world’s largest petrochemical market information provider, with divisions spanning energy and fertilizers. Our aim is to give companies in global commodities markets a competitive advantage by delivering valuable information and analytics tools which enable our customers to identify and react to opportunities in markets which are constantly evolving. We have more than 30 years’ of experience in providing pricing intelligence and news, forecast data, market analytics and independent consulting to buyers, sellers and analysts. With a global staff of more than 600, ICIS has employees based in London, Houston, New York, Singapore, Dubai, Shanghai, Guangzhou, Beijing, Mumbai, Tokyo, Karlsruhe, and Milan. ICIS’ team of journalists is engaged in reporting market prices and news, and ICIS is fully committed to upholding the highest journalistic principles of verification, corroboration and authentication. ICIS has a compliance framework that along with its methodologies and business processes adheres to the requirements of the IOSCO PRA Principles. ICIS is a division of Reed Business Information [http://www.reedbusiness.com ], part of RELX Group [http://www.relxgroup.com ]. About Reed Business Information Reed Business Information (RBI) is a fast-growth provider of information and analytics, solving critical problems for businesses globally. Our strong global products and services hold leading positions across a wide range of industry sectors including finance, agriculture, petrochemicals and aviation where we help customers make key strategic decisions every day. RBI is part of RELX Group, a global provider of information and analytics for professional customers across industries. http://www.reedbusiness.com About RELX Group  RELX Group is a global provider of information and analytics for professional and business customers across industries. The Group serves customers in more than 180 countries and has offices in about 40 countries. It employs approximately 30,000 people of whom almost half are in North America. RELX PLC is a London listed holding company which owns 52.9% of RELX Group. RELX NV is an Amsterdam listed holding company which owns 47.1% of RELX Group. The shares are traded on the London, Amsterdam and New York Stock Exchanges using the following ticker symbols: London: REL; Amsterdam: REN; New York: RELX and RENX. The total market capitalisation is approximately 29.9bn GBP / 34.6bn Euro / 42.7bn USD. www.relx.com [http://www.relx.com ]

Media contact
Jamie Stewart, power markets editor, ICIS
Email: jamie.stewart@icis.com
Direct: +44-(0)-207-911-1933
 

Photo:
http://mma.prnewswire.com/media/619935/ICIS_Logo.jpg

Photo: http://mma.prnewswire.com/media/619935/ICIS_Logo.jpgICIS


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