Encouraging pre-2022 energy prices are a ‘welcome sign for businesses’, claims new report

Following encouraging developments in business energy markets, commercial energy and sustainability consultancy Advantage Utilities is urging businesses in Scotland to revisit their procurement options in order to take advantage of lower market prices.
By Steve PantelliContributor
Published 11th Apr 2024, 08:52 BST
Updated 11th Apr 2024, 08:55 BST

Recent data from The Energy and Climate and Intelligence Unit revealed that renewable sources such as hydro, solar and wind energy generated more electricity than gas in the UK this winter, contributing to gas and power prices returning to levels not seen since before the Russian invasion of Ukraine in February 2022.

The ease in overall prices was significantly aided by a very mild and wet winter, with above-average temperatures leading to reduced heating demand. Above-average wind speeds also increased wind generation which contributed to reductions in gas consumption from gas-fired power plants.

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Advantage Utilities CEO Andrew Grover welcomed the developments in the business energy market, but urged businesses to continue proactivity around energy procurement in light of reduced prices, stating: “The price decline which has continued for the second year running is certainly a welcome sign for businesses.

Transmission Towers Under Sky.Transmission Towers Under Sky.
Transmission Towers Under Sky.

"But even in the face of positive market fundamentals, businesses must exercise sufficient caution through exploring procurement options - including flexible procurement - to ensure they’re in the best position should variables and prices change - whether caused by geopolitical risks or other sudden increases to demand or supply.”

Further bolstering the positive impact of energy prices, European gas storage levels are very healthy, removing doubts around energy security, with stock levels sitting at 58% of capacity - higher than average when compared to previous years at the same point in time.

“With energy prices easing beyond what was initially forecast by several respected commentators, the overall expectation was that energy market prices would have stayed at their historic highs into the longer term. However, whilst prices have come down, the precarious nature of the markets could quickly reverse some of this progress, which is why it’s so imperative that businesses explore their current procurement options,” Grover added.

For more information on Advantage Utilities, visit www.advantageutilities.com

Related topics:ScotlandUkraine