LONDON, October 3, 2014 /PRNewswire/ --
UK generation shortage and Ukraine crisis raise power prices despite long-term downward trend
ICIS, the global independent price reporting agency, has highlighted wholesale market concerns over the threat of gas and power supply shortages this winter, with the release of its third quarter (Q3) analysis of 2014 into the ICIS Power Index (IPI).
The IPI, which reflects wholesale power prices over a year of delivery, confirms a downward trend, but also reveals a recent peak due to concerns over a potential shortage of supply. ICIS' data and sources show this is a result of more nuclear generation capacity being offline for the winter than expected. The news that these outages could last into December 2014 caused the IPI to rise by 2.5 per cent day on day, when the news was announced on the 4th September - one of the largest single increases this year.
At the same time, ongoing tension between Russia and Ukraine has caused concern over security of gas supplies. While Russia does not directly export gas to the UK, any disruptions to its supplies to continental Europe have a powerful knock-on effect on the UK market.
"Energy companies are actively buying and selling electricity in the market right now for delivery over the next year," said Zoe Double, Head of Power at ICIS. "Any price rises on the wholesale market could affect what consumers pay later on."
The IPI delivers insight into the complex world of wholesale power prices for both households and industrial electricity consumers. In its first comprehensive quarterly analysis following the launch in August 2014, the index has shown that the conflict in Ukraine exacerbated fears over reduced UK power generation.
The ICIS Power Index is updated every working day and is freely available from the ICIS website, along with ICIS' analysis of price trends and volumes during Q3 2014.
Note to Editors
The ICIS Power Index enjoys strong support across the UK energy market:
- Jeremy Nicholson, director of the Energy Intensive Users Group
"This is a meaningful index that will help consumers understand the costs their suppliers are passing on. It's a positive move for transparency - the more information out there, the better."
- Angela Knight, Chief Executive of Energy UK
"Energy UK, and its members has been very keen to see accurate, high-quality information readily and easily available so that everyone - not just energy insiders - can see what is going on in the electricity market. The ICIS Power Index is a great step forward in helping dispel myths about energy prices."
- Andrew Buckley, director-general, Major Energy Users Council
"Wholesale price movements are key information for our members, and the new ICIS Power Index will help bring clarity to what's going on."
- Nigel Cornwall, managing director, Cornwall Energy
"The IPI is a good idea - it's the right way to show greater transparency on the wholesale market."
- David Jutton, managing director, Jutton Associates
"The IPI is a useful and clear index for UK power. We've had a need for a similar number for a long time."
ICIS is an independent price reporting agency focusing on global energy, petrochemical and fertilizer markets, and we have covered the complex UK electricity market for nearly two decades. Every day, we assess electricity contracts for more than 40 different delivery periods in the UK market alone. The analysis and data that we produce is widely used as a reference price in energy contracts.
It is our aim to give companies in global commodities markets a competitive advantage by delivering trusted pricing data, high-value news, analysis and independent consulting, enabling our customers to make better-informed trading and planning decisions.
With a global staff of more than 800, ICIS has employees based in Houston, Washington, New York, London, Montpellier, Dusseldorf, Karlsruhe, Milan, Mumbai, Singapore, Guangzhou, Beijing, Shanghai, Yantai, Tokyo and Perth. ICIS is a division of Reed Business Information, part of Reed Elsevier Plc.
About Reed Business Information
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Tara Sabanandan, Marketing Manager, ICIS