By Sam Bannister, Portfolio Manager at npower Business Solutions
It may not surprise you to learn that one of the questions my team and I are regularly asked is ‘when will energy prices come down?’
And unfortunately, it’s not a question with an easy answer.
When it comes to energy prices we’re seeing at the moment, there are a number of complex factors at play. Currently, the price we pay is determined to a large extent by activity in the wholesale commodity markets. This is influenced by a diverse range of factors – from supply pressures and global affairs to government policy and even the weather.
While price volatility is common, we’ve not seen anything like the rollercoaster that followed the start of the Russia/ Ukraine conflict in early 2022. And although the huge price rises we saw last year have since dropped back, it’s unlikely that we’ll see a return to pre-Covid levels any time soon.
But do you know how much gas the UK imported from Russia? And why, when we produce so much renewable energy now, it’s made such a difference not only to the price we pay for gas, but also electricity too?
What about the performance of nuclear power stations in France? Why does this impact our energy prices in the UK?
In response to all these growing questions from business customers, we’ve produced a new report: ‘Wholesale Energy Prices’.
Our aim is to demystify what, for many, is a complex and confusing picture. As well as looking at the key fundamental of supply versus demand, this report also explores why:
- Japan’s decision to extend the lifespan of its nuclear power stations is good news for us
- More renewable generation makes our relationship with China more important
- Rainfall in Brazil impacts our gas prices
- We are far more vulnerable to gas market volatility than our European neighbours
- Asia’s economic output is important to our energy costs
- The weather really is an important topic!
For businesses, understanding the wider factors that impact what your company pays for its energy has never been more important. ‘Wholesale Energy Prices’ is available to download now.