Energy and Utility Management Consultants

New entrant into electricity supply, German solar generations soars

May 2012

 

Dong Energy, who acquired Shell Gas Direct last autumn, has announced that they are to move into the electricity market within the next 12 months. Shell Gas Direct, as the name suggests, had historically only dealt with the supply of natural gas to commercial and industrial users, and this move by Dong is one we welcome as we look to secure best possible prices for our clients in a very competitive market. Being one of the largest wind-farm developers in the UK suggests that much of Dong Energy’s generation will come from renewable sources which often leads to a slight premium in prices – one that can be offset somewhat by the avoidance of CCL charges and keen negotiations, so as a company we’re very keen to start working with a another major energy supplier on behalf of our clients.

 

Generation by solar power in Germany reached an all-time high of 22 gigawatts (the equivalent to 20 nuclear power stations running at full capacity) at the end of last week, with some 50% of the nation’s demand coming from the renewable source. This had a knock-on effect in neighbouring countries to which Germany exports energy and saw a fall in the wholesale prices of electricity across much of northern Europe. The peak of 22GW is almost double the production at the same time last year, and is a demonstration as to exactly what can be achieved in the move towards renewable energy (Germany closed 8 nuclear power stations last year; largely in light of the Fukushima disaster). Although rising costs in the production of solar power and related expenses may halt this charge somewhat, in the short-term this is very positive news. Natural Gas has been rebranded as a ‘green’ energy by the EU as the goalposts are moved to allow all ‘low carbon’ generation to be classed as renewable.

 

The sceptics among us might suggest that this is just a loophole being exploited to ensure the EU reach self-imposed renewable targets, and to a certain degree, they’d be right. Sure to be rejected and disputed by those responsible, a document ‘leaked’ to The Guardian suggests that billions of Euros earmarked for investment in solar and wave power, among others, may be diverted instead to subsidise the development of natural gas generation. While securing the future of energy is vital, it can be easily and readily argued that it is equally crucial to move away from fossil fuels (‘low carbon’ or otherwise) and look to reverse the current UK energy generation mix which consists of more than 80% of energy from fossil and nuclear fuels and less than 10% from renewable energy (the remaining largely coming from imports). Good news comes from banking giant Goldman Sachs though, as they announce they are to invest $40 billion in renewable energy across the globe over the next ten years.  Hopefully other such companies will follow suit and invest equally as heavily, and reap the rewards of what has been described as one of the “biggest profit opportunities since economists got excited about emerging markets in 2001”.

 

Talks between Iran and the UN took place in Baghdad last week, but were ultimately inconclusive and a second round of talks is due to take place in Moscow on June 18th with a view to a peaceful resolution. Iran have stated that uranium enrichment for energy purposes is their right, and they will not be swayed from their plans, but are yet to prove to the five permanent members of the UN Security Council (& Germany) that those plans are entirely peaceful. The potential disruption of flows of Iranian oil are still looming large over markets, and there remains the possibility of increases in the price of Brent crude oil should a resolution not be found. We will, of course, report on any updates on this. Ensure your business is up to date with energy market prices and news by subscribing to this feed; simply use the RSS link at the top right of this page and updates will be delivered directly to your inbox. If you’d like to discuss your Business Energy needs with a Utility Consultant or an Energy Management Consultant then give us a call.

 

 

 

 

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