Energy and Utility Management Consultants

Government proposes new laws to make energy market rigging a criminal offence

August 2014


The government has revealed new proposals under which anyone found guilty of rigging wholesale gas and electricity prices could face up to two years in jail. Under the new laws, “it would be a criminal offence to fix the price of energy at an artificial level, or use insider information to buy or sell energy on the wholesale market”. Energy secretary Ed Davey stated that “manipulating the energy market is absolutely unacceptable, and these proposals provide a much stronger deterrent - more in line with the approach taken in the financial markets”. The new measures are designed to “safeguard consumers from unfair practices" and if approved by parliament, could come into force in spring 2015.

Renewable generation approaches 15% of UK power mix in 2013

The DECC has published it’s energy statistics for 2013, which show that 14.9% of power supplied in the UK during 2013 was generated by renewable sources. Installed renewable generation capacities have increased significantly in 2013, with onshore wind rising by 27%, offshore wind by 23% and solar PV by 59%. Energy secretary Ed Davey noted that these statistics show that the Government’s drive to bring forward increased renewables investment “is paying off”, with renewable generation “having more than doubled in just four years”.

As part of the general analysis of our client’s utility consumption figures, CTP identified that the gas consumption at one of their sites had risen considerably in recent months, compared to the equivalent months last year. Comparing the gas consumption against ‘degrees days’ (a measure of average external temperature) revealed that the expected gas consumption should in fact have been lower than last year (warmer external temperatures).

This issue was raised to the client, who in turn advised their M&E contractors of the problem. It came to light that there have been issues with the boilers and BMS system at the property. The M&E contractors were able to review the on site operations, and since then the gas consumption has dropped significantly. The average daily gas consumption has been reduced by over 90%. The consumption drop is equivalent to an annual saving of around £10,000 for the gas supply to this site.

Through our thorough Account management and reporting processes, we regularly identify significant savings potential including, but not limited to;

•    improving heating controls through comparing to degree day data,
•    changing tariff structures, to ensure they best suit requirements
•    reviewing available capacities to avoid excess costs or penalty charges
•    analysing half hourly demand data to identify irregular usage patterns
•    transferring meter operator contracts to preferential rates
•    ensuring any power factor charges are legitimately applied, and not based on industry standard estimates, and recommending action where applicable

Wholesale Market Price Update – 8th August 2014

Wholesale electricity and gas market movements have been dominated by events in Eastern Ukraine in recent weeks. The downing of flight MH17, and the resulting threats of retaliatory sanctions against Russia, caused prices to jump significantly. Prices have, however, since dropped back to levels seen in mid July, following the announcement that those sanctions will not include restrictions on the gas sector. A fire at Ferrybridge Power Station, coupled with rising coal prices, has also been exerting an upward influence on the markets. This has, however, been balanced somewhat by a weak oil market.

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