So Boris closed the Conservative Party conference in his typically rambunctious style and, despite continued resistance from across the Irish Sea, is insistent that we will have a deal in place before the exit deadline of 31st October.
On the off-chance this doesn’t happen and we exit without a deal, Ofgem has published a letter reconfirming previous communications around the regulatory framework for trading wholesale gas and power throughout the EU (REMIT). Essentially, from a market operation perspective, a no-deal Brexit is not expected to create any difficulties or change and everything will carry on as before.
We do, however, urge readers to check in with their energy procurement team and comfort themselves as to the appropriateness of their risk strategy since any drastic changes to currency exchange rates will have knock-on impacts on LNG pricing, oil prices and carbon prices.
This is especially important as the latest set of statistics published by BEIS shows that over the past twelve months, average electricity prices in the non-domestic sector rose by 4.6 per cent, with the greatest rise in the Small (SME) band.
Add in the CCL impacts, and average non-domestic electricity prices have shot up by 7.2 per cent between Q2 2018 and Q2 2019.
The end of October signals a deadline not only for the European Commission but also for four electricity suppliers. The deadline Renewables Obligation payments has been and gone and Ofgem has warned the suppliers that if the books are not balanced by hallowe’en, the regulator may commence proceedings to revoke their supplier licences. Cumulatively, there is £14million outstanding, of which £9million is owed by local-authority owned supplier, Robin Hood Energy.
There is however some good news.
Businesses in Scotland can now access a major fund to support decarbonisation of heat and industrial heating processes under the Scottish Low Carbon Heating Fund. The applicant needs to match the funding but this means up to 50% of the cost of eligible projects could be supported. Worth a punt, we reckon!
Ofwat are also trying to make life easier for water customers in England by temporarily removing penalties on retailers for submitting meter reads late. It’s hoped this amnesty will encourage retailers to cleanse their data-sets, submit meter reads to CMOS and improve the database for all customers.
Finally, Ofgem data shows that over 33% of our electricity supply mix is now being sourced from renewables.
It’s a bright, bright sunshiny dataset.
Yours,
George
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