BP has announced a $6.7bn quarterly loss after global demand for oil slumped during the height of the Covid-19 pandemic.
Oil prices fell dramatically as a result of the economic slowdown and turned negative for the first time in consumer history in April.
In the short-term, BP said it expected demand for oil could be up to nine million barrels per day lower compared to last year.
Shareholder dividends have been halved with forecasts for a challenging future ahead, while 10,000 jobs are to be cut – with around a fifth of the redundancies expected to be in the UK.
In response, BP said it wanted to move away from being a traditional oil company and reinvent itself as an integrated energy company by focusing on renewables and bioenergy as well as hydrogen and carbon capture and storage technology.
Green business energy is proving more popular than ever as businesses increasingly set out a procurement energy strategy aligned to sustainability as well as cost.
While not all businesses are able to generate their own energy – a sustainable way of putting less pressure on the national grid – green energy contracts are widely available.
But what exactly is a green energy contract?
Basically, the gas and electricity that powers your premises of work comes from a supplier who has sourced it through a renewable energy generator such as wind or solar farms, hydroelectric power stations or biomass plants.
The amount of energy from renewable sources differs from supplier to supplier; however, it is a legal requirement for them to publish details of their fuel mix.
The more businesses (and households) that adopt this policy, the more renewable energy is fed back into the grid, and the country’s dependence on fossil fuels reduces, helping to alleviate the onset of climate change as a result.
If you’d like some advice on the range of green energy contracts that are currently being offered on the market, please get in touch with one of our energy consultants on 01225-867722
As more and more white-collar employees gradually switch back to working in an office environment, now is a good time for businesses to ensure any energy efficiency good practices picked up whilst working from home come with them.
Most money-conscious, employees wouldn’t leave lights on unnecessarily or not properly shutdown their electrical devices whilst working from at home, and these type of behaviours should be present in the office environment, too.
You could even employ an ‘energy champion’ from within the workforce to take on the responsibility of engaging their colleagues in energy-saving measures in a bid to reduce the company’s energy bill.
Some simple measures such as the installation of movement sensitive lighting and LED lightbulbs can help massively in reducing the energy bill, too, without too much initial financial outlay.
Alternatively, you could turn to an external energy agency to conduct an energy audit and determine how you can use less power without compromising business throughput, output or thermal comfort and wellbeing of staff. An Energy Management health check workshop will cost you nothing but could save you thousands of pounds.
A Senior Energy Management certified assessor will visit your organisation and present his/her ideas over the course of a morning or afternoon with the aim of highlighting energy efficiency projects that can be easily implemented with little or no capital expenditure.
If you would like to discuss any energy efficiency measures, please get in touch with a member of our team on 01225-867722.
Energy is often a business’ biggest running cost after wages. That is why it is crucial to ensure you are not paying over the odds for powering your office, factory or warehouse, particularly if you prefer the security of a fixed-term contract over a more flexible arrangement.
Many energy contracts simply rollover once the current term expires, and this can lead to a business paying more per unit for their gas and electricity than they need to.
With the market as volatile as it is right now, switching energy providers can be in your best interests. Normally, your energy supplier – whether it is one of the so-called ‘Big 6’ or one of the smaller operators – will contact you up to six months before your contract enters its renewal window.
Armed with the facts
At this time, it is important to have all the right information to hand and to understand how, when and where you are consuming the most energy, especially if you operate over multiple sites, as this could impact on how much you eventually pay.
Switching energy suppliers can take anything between four to six weeks but without any disruption to your current supply.
Many businesses, particularly at times of great stress, either don’t have the resources to handle this energy procurement process or do not have the expertise to shine a light on unfavourable terms and conditions which may hit the business financially in the long run.
If you consider yourself to be in such a situation, we’d be more than happy to assist you in getting the right deal at the right time and for the right duration.
The UK, like many parts of Europe, has seen solar power generation records broken in the second half of April, with reduced levels of air pollution and clearer skies due to the lockdown said to be contributory factors.
And there was further good news for the industry with this week’s announcement from the Department for Business, Energy and Industrial Strategy (BEIS) that a new solar farm in Kent has been approved.
The farm is set to be the largest of its kind in the UK and will be located just outside of Faversham.
The subsidy-free project would begin next year, with electricity generation expected to start by 2023. The 350MW farm would feature almost 900,000 solar panels across 900 acres of farmland.
The developers claim that the farm would generate enough renewable electricity to power 91,000 homes, would reduce UK carbon emissions by 68,000 tonnes annually and generate £1m annually for the Kent and Swale councils.
Beyond the immediate impact on health, the current Covid-19 crisis has major implications for global economies, energy use and CO2 emissions.
Analysis of daily data through to mid-April by the International Energy Agency (IEA) shows that countries in full lockdown during this period experienced an average 25% decline in energy demand per week and countries in partial lockdown an average 18% decline.
Daily data collected for 30 countries until 14 April, representing over two-thirds of global energy demand, show that demand depression depends on duration and stringency of lockdowns.
Global energy demand declined by 3.8% in the first quarter of 2020, with most of the impact felt in March as confinement measures were enforced in Europe, North America and elsewhere.
At the start of 2020, it was forecast that global energy investment would grow by 2%; instead, it has fallen by 20% – a fall in spending of $400billion.
Covid-19 impact: the IEA’s sector-by-sector energy breakdown (for the first quarter of 2020)
Global coal demand was hit the hardest, falling by almost 8% compared with the first quarter of 2019. Three reasons converged to explain this drop. China – a coal-based economy – was the country the hardest hit by Covid‑19 in the first quarter; cheap gas and continued growth in renewables elsewhere challenged coal, and mild weather also capped coal use.
Oil demand was also hit strongly, down nearly 5% in the first quarter, mostly by curtailment in mobility and aviation, which account for nearly 60% of global oil demand. By the end of March, global road transport activity was almost 50% below the 2019 average and aviation 60% below.
The impact of the pandemic on gas demand was more moderate, at around 2%, as gas-based economies were not strongly affected in the first quarter of 2020.
Renewables were the only source that posted growth in demand, driven by larger installed capacity and priority dispatch.
Electricity demand has been significantly reduced as a result of lockdown measures, with knock-on effects on the power mix. Electricity demand has been depressed by 20% or more during periods of full lockdown in several countries, as upticks for residential demand are far outweighed by reductions in commercial and industrial operations. For weeks, the shape of demand resembled that of a prolonged Sunday. Demand reductions have lifted the share of renewables in the electricity supply, as their output is largely unaffected by demand. Demand fell for all other sources of electricity, including coal, gas and nuclear power.
Business and Commerce is in a very strange place at this time, some businesses have seen a sharp upturn in turnover as they fulfil the country’s requirements over this “lockdown” period, such as bicycle manufacturers, thanks to the sharp upturn in that particular form of exercise, while others simply had no choice but to heed the government’s advice and close their doors.
The downturn in the UK and world economy has lowered the demand for energy, and wholesale prices have followed suit. Short-term markets have taken the biggest hit, but markets further out have also reduced during this period, reflecting an uncertain future.
Energy Management is always on hand to assist clients old and new, either via a call, an email or through our bespoke portal reporting software ‘EM-Powered’.
Clients who benefit from EM-Powered find it helps them make better-informed decisions over their energy-related strategy.
It enables our clients to view and report on a range of information for your business including consumption, cost data and carbon production, plus provides up-to-date market information.
For more information about EM-Powered and an online demonstration of the portal, contact a member of the team now on 01225 867722 or email firstname.lastname@example.org
Global emissions are set for unprecedented fall this year as a direct result of the coronavirus pandemic, according to a report in Bloomberg Green.
As less oil, gas and electricity is consumed due to the slowdown in industrial activity across the globe, and renewables take up a larger share of the energy market, global emissions will fall by 8% (2.6 billion metric tons) in 2020 – the largest fall in history.
“The energy industry that emerges from this crisis will be significantly different from the one that came before,” Fatih Birol, the International Energy Agency’s (IEA) executive director, said in a statement released from the organisation’s headquarters in Paris on Thursday.
Even though overall energy demand has decreased by as much as 6% this year, renewables in many countries get first priority to feed electricity into the grid.
While fossil-fuel generators shut down to prevent a system overload, there is nothing to stop solar, wind and hydro power producers selling all their output.
Unseasonably warm, yet windy, weather throughout April has also been favourable for solar and wind farm owners and the dominance of green energy in the overall market is only set to continue with low-carbon sources set to be responsible for 40% of global electricity generation.
It’s not all a breeze for renewables
Renewables are still facing challenges of their own, however. In the wake of Covid-19, renewable energy has been rocked by global supply chain disruption and heightened part costs.
Around 11% of the world’s wind turbines were shut this week because of the virus, according to Bloomberg, while work on constructing new wind farms has been delayed by restrictions on the movement of workers and regulatory processes.
With the big oil players all having significantly invested in renewable energy, an article in Power Technology says they are expected to respond to the record slump in oil prices by cost-cutting and shifting focus away from their clean energy commitments in the short term.
All things considered, this could lead to a slowdown in new renewable energy projects coming online this year.
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.
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.