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Prices Relax and Level Out |
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Wednesday, 21 July 2010 14:28 |
It is with a small sigh of relief that we can report that the energy markets have dropped over the past week. Although the upward trend was not unexpected - we can't enjoy rock-bottom prices all the time - at the start of July we hit a high electricity wholesale price of almost 5 p/kWh, and gas wholesale of 1.95 p/kWh - the highest prices since the market slump back in February 2009.
Oil prices have been fluctuating within $8 per barrel either side of the $80 mark since the start of the year and aren't following the behavior of the gas and electricity markets quite as closely as historically, but are still a very good guide for both of those markets.
Contributing to the recent fall in prices is increased LNG (Liquefied Natural Gas) storage and deliveries as more and more we embrace this new method of transporting and storing gas - also recent National Grid reports suggesting that the UK has comfortable amounts of surplus generation available for the coming winter.
Shared savings consultants enjoy falling prices because they can claim to be saving client's money by their own endeavors, whereas, it is actually the market that is providing the savings. Just a reminder that we work on an agreed fee basis - this means our fees are transparent and easily incorporated into your budgets. Nor do we take any payments from suppliers or their business partners which helps us remain completely impartial and have only our clients' best interests at heart. Compare this with brokers, who are paid commission by suppliers which is added to the charges made for energy in p/kWh, therefore being completely hidden to you the client. Our costs are lower than brokers and shared saving consultants and client’s know what it is costing.
In order to make the most of our expert Energy Consultants and Utility Consultants for your energy procurement needs, as well as bill validation, which is not offered by all consultancies (and certainly not by brokers!) and extra benefits such as tenant billing, just get in touch for a chat and see what we can do for you |
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BP Making Good Progress in the Gulf of Mexico |
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Wednesday, 14 July 2010 06:22 |
Live television coverage broadcast across the world has shown a new cap being placed on the leaking oil well in the Gulf of Mexico. BP is quoted as saying that its next step will be to carry out tests to ensure there are no other leaks from the well and that the cap itself does not leak under pressure although they are delaying them because both BP and US Coast Guard officials believe further analysis was needed before pressure testing could begin. These tests, including monitoring, could last from six hours to two days. Meanwhile, oil will still leak into the Gulf. The old cap, removed on Saturday, did not have a tight fit and allowed crude oil to escape.
It is also reported that one of two relief wells being drilled adjacent to the leaking well, is only about 100 feet from the leaking well. These relief wells are meant to intercept the oil from the leaking well and divert it away from the broken pipes causing the leaks and into new pipes. |
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Gas & Electricity Prices Continue to Rise |
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Wednesday, 07 July 2010 09:51 |
Unfortunately, we're continuing to see a rise in wholesale prices of both electricity and gas and they are now at the highest point since February 2009 when the market returned to 'normal' levels after the freak year that was 2008.
We have been seeing a recent steady upward climb with peaks and troughs leading to a market reminisce of the 2007 markets, but we're still in an excellent place to be securing long-term contracts. It is widely assumed that the lowest point is behind us for a while, but with the forecast increase in Liquefied Natural Gas (LNG) deliveries, the balmy summer and gradual recovery of the economy a repeat of the spike up to the wholesale prices of 9.0p/kWh in July 2008, as opposed to the current 4.8p/kWh, is unlikely, but unfortunately we can never say never.
In order to avoid any unexpected increases in the market and secure your energy contracts - get in touch now to take advantage of our energy procurement experts, and why not find out more about our full Utility Bureau Service which includes Bill Validation, Utility Consultancy and Tenant Billing amongst other benefits, and all at a fixed, agreed price. |
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Utility Broker Charges are High |
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Thursday, 01 July 2010 09:09 |
During an investigation for a new Utility Bureau Service client of ours, it came to light that the commission being paid by the electricity supply company to the Utility Broker who formerly acted on behalf of this new client, was about twice as much as we are now charging as a fixed fee.
As we all know, any commission that all Utility Companies pay to a Brokers, is added to the prices at the time of tendering so that clients pay for the commission but don’t know how much it is as there is no legal obligation to disclose it. Therefore, in this instance and in the majority of all other cases, the client ends up actually paying more for the Broker than paying us a fixed fee. However, the client thinks that they are saving money as the many Brokers claim that their service is free or self financing. In addition, our own approach is a much more comprehensive service as we take over all of the procurement and billing duties (checking, validation, chasing credits etc) whereas, most Brokers do not. The end result is client’s of ours get a much better Utility Consultancy service but at a much lower overall cost.
It is about time Government introduced legislation to stop this practice as many organisations are led to believe that using a Utility Broker is cheaper than using our type of Utility Consultancy.
To find out more about our approach, contacts us today. |
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Unwelcome Impact of England's World Cup Exploits |
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Tuesday, 29 June 2010 12:26 |
While most of us just want to forget about the recent displays by the National team at the 2010 FIFA World Cup in South Africa, it is interesting to note the effects on the market at the times of England's recent matches. Fortunately for most (if you can consider it as 'fortunate'), the majority of England's games were outside of normal office hours - but the effects of the Slovenia game at 14:00BST on Wednesday June 23rd saw a lot of staff from all lines of work absent from their posts which gave an irregular market movement and resulted in suppliers withdrawing prices as a knee-jerk reaction (something some of the players were missing perhaps...).
Although market movements can very rarely be put down to single events, the fact that some traders and suppliers were among those absent from work (of course, being the expert energy consultancy we are, we had all hands on deck at all times!), and with many production lines reducing output during the game - the blip in usage and the inability to communicate using the normal procedures resulted in a 'better safe than sorry' attitude as suppliers covered their backs and pulled prices at short notice. This, of course, will have resulted in a lot of wasted time and subsequently duplicated work for those looking to secure business at that time.
In order to take the stress out of utility procurement and utility management, get in touch today and see what we can do for you. |
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China to get “Tough” on Energy Efficiency |
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Wednesday, 23 June 2010 10:12 |
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Recent reports indicate that China is to get “tough” on companies who do not meet Energy Efficiency targets.
The current Chinese target is to reduce the energy intensity of the economy (defined as the amount of wealth produced per kWh of energy consumed) by 20% between 2006 and 2010. In the previous four years to date, the reduction achieved is said to be 14.38%.
Wen Jiabao, the Chinese premier, is apparantly stressing his willingness for the Chinese Government to take drastic action to ensure the target is met - although clearly, there is not much time left. Wen also declared intentions to shut down older coal fired electricity generating units among a number of other measures to increase energy efficiency of utilities. |
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Tuesday, 22 June 2010 12:08 |
Following the last 6 weeks of steady price increases, the last few days has seen the market soften somewhat. Although the current position is still akin to markets in 2005-2006, and is in a very good place, it might be that the lowest points reached in February and April will not been seen again for the foreseeable future.
As experts in Energy Procurement, we put the majority of our clients' business out to tender at the beginning of this year and have secured the bulk of our contracts for this calendar year, with huge savings being seen over both current and previous contracts, and now over the current markets.
Although predicting the energy markets has been described by at least one noted commentator as "a mugs game" - with our in-depth market knowledge and preferred industry partners, our Utility Consultants constantly track the market and look at worldwide events which may cause market changes. We are also in regular contact with all of our clients for energy management as well as bill validation, which enables us to secure the best deals possible, at the best time to suit our clients and take advantage of the market.
Contact us now if you're not already reaping the benefits of our Utility Bureau Services. |
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Update on Oil Leak in Gulf of Mexico |
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Tuesday, 08 June 2010 07:59 |
Further foiled efforts to stem the oil leak from "Deepwater Horizon", the mile-deep well in the Gulf of Mexico are having widespread effects on political, environmental and supply policies, but haven't really affected bottom line costs for end-users.
Following the initial failed attempt to place a giant 'bell' over the leak in order to funnel expelled oil aboard waiting oil tankers, and the subsequent failed effort of dumping 'heavy mud' directly onto the leak - BP are now preparing to remove the damaged pipeline and place a containment dome directly over the wellhead - the results of this are looking favourable, but BP "cannot guarantee success" as such a method hasn't been used at depths of 5,000 feet underwater before.
Estimated to have already wiped billions of US dollars off BP share prices, BP have spent almost $1bn trying to repair the problem and face massive fines which, under US Federal Law could range from $75 million to $10 billion.
So far market fluctuations have retained their recent trend of small spikes and troughs - the financial affect on BP, one of the world's largest oil companies, should not result in drastic increases in oil prices - being a commodity, oil is sold directly to market for whatever the market is willing to pay - no one company will have much influence on prices; unless they massively reduce output, which in this instance is highly unlikely.
Being experts in Energy Procurement we will of course be keeping track of events and possible impacts on prices and recommend best steps for our clients as part of our Utility Bureau Services. |
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Energy Bill announced in Queen's Speech |
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Thursday, 27 May 2010 09:41 |
Legislation is to be introduced that will improve energy efficiency in homes and businesses, will promote low carbon energy production, and will secure the UK’s energy supplies. The Bill will provide a step change in the provision of energy efficiency measures to homes and businesses, and put in place a framework to deliver a future with secure, low carbon energy supplies and fair competition in the energy markets - the latter of importance to Utility Management Consultants.
Energy and Climate Change Secretary, Chris Huhne said,
"The Queen's Speech and last week's programme of Government make clear that energy security and taking real action to tackle climate change aren't add on extras for this new Government, but are vital to our national interest."
"The Energy Bill is designed to help consumers put a stop to wasting energy in their homes through a green deal while making sure our energy system is fit for the 21st century" |
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Our Utility Consultants saved our client £85,000. |
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Tuesday, 25 May 2010 15:17 |
A Utility Bureau Service client was being held responsible by an energy supplier for charges in excess of £85,000 relating to a meter in use during 2005-2008. This was due to non payment for the meter which had long ago been removed by the supplier.
Discussion between our client and the supplier had gone on for a few months without resolution with the debt finally being passed to a collection agency.
We were asked to step in and sort the matter. This we did which included a site visit by an electrical engineer. We were able to quickly prove to the supplier that our client was not responsible for the debt and arrange with the supplier to cancel the debt collection and re-direct the charges to the correct tenant. Our Utility Consultants thus saved our client the £85,000. |
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