News Archive - Monthly Archives: March 2020

Demand for renewables growing quicker than supply in Europe

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The pricing of green energy may need rebalancing if growth in demand for renewables across the European market continues to outpace the growth in supply.

According to figures published in a report from the Association of Issuing Bodies (AIB), demand for renewable energy in Europe – that is tracked and documented with guarantees of origins (GOs) – grew at a rate of 11.7% in 2019, an increase of 61TWh from 2018 levels.

ECOHZ managing director Tom Linberg said: “The growth in the supply of renewable energy tracked and documented with GOs during the same period is estimated to be only 3.5%, resulting in a significantly smaller surplus in 2019 than previous years.”

Spain has the highest growth in GO demand with 38%, followed by France (26%) and Germany (10%), the latter having been the first country to pass the 100TWh mark in 2019

UK impact  

The UK is not a member of the AIB and uses the Renewable Energy Guarantees Origin (REGOs) scheme, although the report found that the UK is still impacting the supply and demand balance across the European market.

The UK currently allows for the import of GOs to the European Energy Certificate System Standards (EECS GOs). Demand has grown year-on-year with the European markets ramping up – export volume is around 20% of the UK’s total import volume.

Due to different reporting schemes adopted, the statistics could be skewed, however, ECOHZ believes the positive trend could lead to a “healthy” price market in 2020.

There are some uncertainties which could impact pricing and surpluses going forward, such as Brexit uncertainty, clarity on the UK policy for GO imports and REGO exports and the Coronavirus pandemic.

With the UK declaring a carbon net zero target of 2050, there has never been a better time to look at renewable energy sources for your business.

Energy Management have years of industry experience with green energy procurement at the forefront of our service offering.

We can tailor bespoke green solutions for your business, meaning you can mitigate market uncertainty whilst securing the best possible contract for your business.

For more information on how we can help, contact a member of the team on 01225 867722 or email sales@energymanagementltd.com.

Business as usual

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Energy Procurement and Management

We would like to reassure all of our clients that they can expect the same high standards of service from us even though our dedicated team of employees are now working from home in line with government recommendations.

Normal office hours apply and telephone calls and emails will be answered as usual.

If you have enquiries, whether they are to ask about energy procurement, business electricity prices, invoice validation or any other service included in our extensive energy management portfolio, please get in touch and one of the team will be happy to help.

Contact details: sales@energymanagementltd.com / 01225-867722

The impact of COVID-19 on energy and the environment

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covid-19

The Coronavirus is seeming to have a spiralling effect, causing major disruption to people’s lives in one way or another. It is also having multiple side-effects on the energy industry and the environment, including very turbulent market pricing.

So far, we have seen the following direct impacts on multiple suppliers/companies we work with on a regular basis, some of these include:

  • A number of suppliers are now only taking emergency phone calls, meaning regular tasks cannot be undertaken.
  • Suppliers are either not quoting which could result in out of contract rates (OCR) or taking up to 15 working days to quote or not taking on any new clients at all
  • Western Power Distribution (WPD) has stopped all contracting other than emergency work only, with many Distribution Network Operators (DNOs) set to follow suit.
  • If businesses are unable to pay bills, and this, in turn, creates a poor credit rating. Energy suppliers will charge a bond as a result which can disrupt cash flows with the knock-on effects potentially felt over the next few years.

Prior to the Covid-19 crisis, Carbon Zero was a major talking point, however, the conversation has gone quiet as short-term thinking has taken over. Personal income and wealth are the primary concerns for people at the moment.

Sustainability on hold?

Many companies had outlined their plans to Carbon Zero targets prior to the pandemic took a grip, which included green energy, renewable energy sources and Electric Vehicles (EV) and installation.

However, since the Coronavirus began it is now estimated that EV battery demand could be downgraded by 4% and solar installations are likely to be 16% lower than previously forecast. It is also expected that 7 in 10 businesses are planning on partially or fully pausing any sustainability announcements.

Many of us are currently working from home or not able to work at all, and that has affected how we communicate with one another. All key green policy meetings have also been postponed and it will be a minimum of six weeks before any UN climate meetings are held in person.

With 16.8 billion people working from home, domestic energy bills could look to increase by £5.2million – which could put a lot of strain on energy providers as well as individuals/family out of work and with no income.

So how does the rest of the world fare?

China has just announced for the first time since going into isolation that they will be relaxing their regulations slightly and allowing individuals involved in the manufacturing sector to go back to work. This could, therefore, cause problems for the rest of the world in terms of energy usage. As their energy output increases and our work decreases, how will this leave us? Will China have the energy they require? Prior to this, China had seen a 25% decrease in its emissions.

Italy has been one of the country’s worst affected by the Coronavirus outbreak, with energy demand on the 18th March recording at being down by 7.45% week-on-week.

Will this ever end?

We all know drastic measures are needed to combat the pandemic, one of which is the cancellation of flights. On the 24th March, we saw 15,650 flights cancelled – the highest number this year.

Another consideration is the number of people – 4.2 billion at the last count – who do not have access to proper sanitation and are unable to follow World Health Organisation guidelines as a result.

What do we expect to see going forward?

In terms of CO2, we could see a similar scenario to the 2008 recession when there was a 6% increase in year-on-year emissions due to businesses and policymakers making up for a loss of productivity. Much depends on the longevity of the lockdown.

Obviously this could have a detrimental impact on businesses attempts to hit their carbon zero targets and the government’s target of being Carbon neutral by 2050.

Oil industry being pulled in both directions

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With a situation where ‘demand is down and supply is up’, oil industry prices continue to suffer in what can only be described as ‘Mad March’.

While the coronavirus pandemic continues to tighten its grip on society leading to a cut in fuel consumption as the global economy slows down, disputes between Saudi Arabia and their rivals has seen the top oil-producing country raise output to full capacity.

Slashed prices

Saudi Arabia slashed export prices and said it would pump at a record of 12.3 million barrels per day, flooding the market with oil that it didn’t need. By contrast, producers in the USA’s top producing state, Texas, have asked for regulatory intervention to reduce production.

International crude oil prices LCOc1 CLc1 have dropped about 45% this month and don’t even cover the cost of much of the world’s production, causing energy companies worldwide to drastically rein in their spending. March 9th witnessed the biggest single-day drop of 24%.

The collapse in demand and a diplomatic impasse between Saudi Arabia, Russia and others have triggered unprecedented responses from governments and investors.

As Reuters reports, it is an industry in distress.

With business energy prices fluctuating wildly, knowing when to strike a deal with suppliers has become an art in itself.

Smart energy procurement is one of the main ways in which companies can save money and our expert knowledge and ability to keep track of the markets in these most volatile of times, makes us very well placed to take care of that side of your business.

If you would like to have a conversation with one of our team of consultants, please give us a call on 01225-867722 or visit our dedicated energy procurement page.

Heavy-emitting firms lagging behind Paris Agreement targets

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Emission reduction targets aligned to the Paris Agreement’s 2C global warming limit are set to be missed by the vast majority of the highest-emitting listed companies, according to the Transition Pathway Initiative’s (TPI) annual report.

The report assessed 238 energy, industrial and transport companies on projected emissions intensity and found that just 18% (43 companies) are on track to deliver emission reductions that are aligned to climate science, with the oil and gas industries lagging behind other sectors. Electric utilities and paper companies, for example, are on the right trajectory.

TPI’s co-chair and chief responsible investment officer at Brunel Pension Partnership Faith Ward said: “The IEA has warned that, while carbon emissions will likely decline this year, in the medium term the coronavirus outbreak could slow down the low carbon transition, as green investments are put on hold by cash-strapped governments and businesses.

“It is therefore of deep concern that so few companies were on the right path before the virus struck. Investors must now use their influence to ensure that climate commitments are ramped up, not discarded in the face of short-term financial pressures.”

The report found that heavy emitting companies in sectors like aluminium, steel and shipping are failing to disclose, or simply don’t have, emissions reduction data aligned to the Paris Agreement.

Professor Simon Dietz, research lead for TPI and Professor of Environmental Policy at the LSE’s Grantham Research Institute on Climate Change and the Environment, said: “Our analysis shows that not only have relatively few companies set emissions targets aligned with the Paris Agreement goals, not all of the companies that have done so are actually on track to meet those targets.

“Particularly in the cement, oil and gas and steel sectors, few companies are reducing their emissions fast enough to deliver their targets. In some cases, companies with targets actually saw their emissions intensity go up in recent years. This shows that investors must not only look at what targets companies have set but also at what those companies are doing on the ground and in the boardroom to deliver them.”

Source: edie.net

Company statement: Covid-19

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covid-19

Please see our statement below regarding the Covid-19 outbreak.

“At Energy Management LLP, we are committed to protecting the wellbeing of our staff, clients and suppliers. We are therefore following the recommendations from the Government and World Health Organisation.

We are presently migrating our office staff towards home working from this week onwards. During this time, we’ll be doing our very best to offer our usual level of service. We are finalising testing on our remote working capability as part of our Business Continuity Plan and can confirm that existing telephone lines and e-mail addresses will remain functional so you can still get in touch with all your usual points of contact.

During this period, the office itself will be closed to visitors unless approved by senior management. Please contact us via telephone or email or alternatively we are all equipped with video conferencing facilities.

We’d like to provide you with the reassurance that we can continue to serve your needs should a longer-term solution be required in accordance with Government and WHO advice.

We will continue to keep you informed of any changes and thank you for your continued support.”

Any questions please contact the office on 01225-867722

For information on Covid-19 visit the world health organisation for more information.

Apprenticeship Scheme is a proven pathway to success

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Since its introduction in October 2017, Energy Management’s apprenticeship scheme has gone from strength to strength.

Two current employees have graduated from the scheme and now hold key roles within the company, while a third is currently undertaking their Business Administration Level 3 apprenticeship qualification.

Annie Robins and Lewis Payne were appointed as the first apprentices, enrolled through Wiltshire College, and have been shining examples of how the balance of work experience and education can be a win-win situation for employer and employee alike.

Annie is two years into an Account Administration Manager (AAM) role and has recently taken on the responsibility for Supervising the AAM Team’s training and development, while Lewis, in Engineering Support, will be a big loss to the engineering department once he leaves later this year to commence a university degree.

Jac Stone has been promoted from sales support to a Business Development Executive role, whilst undertaking a Chartered Manager Degree Apprenticeship at the University of West of England.

Callum Parsons has recently been appointed to the role of Engineering Support, to work alongside Lewis until he leaves for university.  After a period of settling into his new role, Callum will embark on a Junior Energy Manager apprenticeship, with Nationwide Energy Training Services.

Meanwhile, Harry Barter is a Level 3 International Business Administration apprentice.

Personal development is a key component of the scheme which spans both the energy management and water management sides of the business and as a result, the company is looking to open opportunities for upskilling through apprenticeships to all existing staff in areas such as Leadership and Management.

Energy Management CEO Steve Retford said: “All of the apprentices that have come through the scheme so far have done themselves and the company proud and it is a source of great satisfaction to see them flourishing in their roles and adding so much value to the company. We hope to announce more apprenticeship vacancies soon.”

-ENDS-

An energy framework that delivers for the public sector

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Energy framework

Looking after the health, fitness, safety and education of the nation does not come cheap. In 2019, the figure for powering the public sector was estimated to be an eye-watering £3.4 billion.

Keeping offices, hospital wards, classrooms and leisure centres heated, lit, ventilated and air conditioned contributes towards a large percentage of a local authority’s total expenditure.

Controlling costs is a key focus for councils under financial pressure. Fundamental to this goal is smart energy procurement, even more so in times when the markets are volatile due to a host of geopolitical factors and health-related issues such as the coronavirus outbreak.

Buying energy is not always straightforward but the Choice Energy Framework (CEF), which involves a panel of six pre-selected suppliers, makes it as simple and as competitive as it can be.

With a range of supply parameters to consider (e.g. scope of services, technical capability, procurement mechanism), public sector clients need to have access to easy and ready to use Value for Money resources.

The aim of CEF is to make procuring these services more user-friendly. It minimises the cost of energy procurement while retaining accessibility and transparency.

Approved by The Official Journal of the European Union (OJEU), the CEF enables signed-up organisations to avoid time-consuming form filling and could save them as much as £20,000 in admin fees.

The CEF has been developed by Shepton Mallet Town Council and is being managed by Energy Management LLP.

The result of this is a Framework Agreement designed and procured by the public sector, for the public sector, applicable throughout the United Kingdom.

For more details on CEF, click here.

Coronavirus and the energy price market

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energy price

Subscribers to our Market Intelligence monthly bulletin will be only too aware that there are a multitude of factors driving the energy price market.

If you compare business electricity prices from one day to another, they can look very different depending on how bearish or bullish the market is.

On top of all the geopolitical and meteorological factors at play, the coronavirus is an extremely unwelcome addition to an already complex situation.

With the viral outbreak spreading to more countries, the price of oil has dropped markedly as global demand weakens even further due to production cuts in places like China, the source of the COVID-19 disease.

Brent crude, the international standard, dropped 14% for the week to its lowest levels since July 2017, closing Friday at a fraction over $50 a barrel. Cuts in oil production are now being called for by countries such as Saudi Arabia to stabilise demand.

For any energy consultant, such scenarios present challenges, especially around energy procurement, which is why experience is so important in good energy management.

Through years spent in the industry, Energy Management’s energy consultants know the markets inside and out and are across all the news that could impact on our clients’ energy deals.

And this knowledge is complemented by energy management portals such as EM-Powered and its wide-ranging benefits, including the ability to compare business energy consumption over specified periods of time.

That historical data can then be used to help our energy consultants make better-informed decisions on the type of energy procurement right for your business.