October Review By Adam Novakovic As we head into the winter months, gas prices and availability become a higher priority for many businesses and households. In this month’s review we’ll be looking at the factors set to dictate how gas prices move over the coming season. October started with fear in the energy markets as Iran launched retaliatory strikes against Israel. Worries of the conflict expanding have been a repetitive theme in energy markets for the past year and it seemed as though that was unlikely to change. The increased military activity had led to rising prices, however, as the month progressed, hopes of a possible ceasefire have increased with leadership on both sides signalling they may be willing to put an end to hostilities. How this plays out over the coming days and weeks could be a key factor in the stability of energy prices throughout the coming winter. Meteorological forecasts have now confirmed that the UK is likely to see a La Niña winter. La Niña weather patterns refer to cooling oceans and strong winds which will have an impact on British conditions. During La Niña winters it is more likely that the UK will see a cold start to winter, a milder end, and a wet Spring. A milder end to winter would bring relief and take any pressure of the gas reserves which are currently close to being 100% full. The current forecasts make it seem unlikely that a winter of sustained cold temperatures (when compared to historic averages) is forthcoming. A POWWR energy report released in October has shown that business energy spending is increasing with businesses using 4.1% more energy during the past quarter. Energy prices remain a key concern for many high-consuming industries. Since the end of February, prices have been steadily rising. The wholesale energy prices for gas on October 31 st were more than 80% higher than they were in late February. For a manufacturing business with a 3GWh summer consumption, the difference between purchasing next summer’s energy back in February compared to today, is a difference of approximately £350k.

September Review By Adam Novakovic September was a rollercoaster month for UK energy prices. In the wholesale market, prices dropped 20% from the start of the month through to the 19 th , only to then rise over the final 11 days of September -- undoing much of the previous work. In this article, we will review the factors behind these moves. As mentioned in previous months, the resumption of Norwegian gas production was always set to be a boost to the markets. At the start of the month, Norwegian supplies resumed. This, coupled with the healthy reserve levels, led the markets to believe concerns on the supply-side were overstated, and this caused prices to drop. There were some temporary increases in demand as the UK entered a cold snap a couple of weeks into September, but this was a minor speed bump in the path of the descending energy prices. One of the main fears surrounding energy supply is that no deal has yet been agreed to suitably replace the Russian gas that will cease being delivered when its contract terminates at the end of 2024. So, it was a big boost when news began to circulate that Ukraine and Azerbaijan had reached a deal where Ukraine would deliver Azerbaijani gas to mainland Europe. Prices continued to sink further as news spread, and this was seen as beneficial to the supply of gas throughout the continent. However, the Ukrainian news outlet that first broke the news was forced to issue a retraction as the Azerbaijani energy ministry denied the story and Ukrainian government sources clarified that no such deal was in place. This caused prices to rise sharply as the markets now had a renewed focus on the hole that may be left in the supply-side picture when Russia’s deal with Europe reaches its conclusion. A further catalyst for rising prices then came from the Middle East. While it appeared many Arab nations had been keen to pursue a peace deal, any hopes of conflicts subsiding quickly were ended with Israeli operations targeting Iran and Lebanon. It now seems inevitable that the conflict will spread and escalate during the coming months, and the shipping of LNG to Europe will almost certainly be impacted. Whilst it is impossible to accurately predict how geopolitical events will play out, this does seem likely to be a continued source of energy price rises for the foreseeable future. During September, it was revealed that the UK has the highest energy prices of all industrialised nations, more than double the per unit cost of Portugal and more than 3 times the cost of some Scandinavian nations. In not-unrelated news, OFGEM announced that UK energy debt has now reached £3.7bn, with energy debt having grown by 50% in the previous year. For many businesses, energy spend is an increasingly large concern that has no obvious solution. If you would like to discover ways to reduce your energy spend, or ensure you aren’t paying any more than necessary, visit www.seemoreenergy.co.uk or feel free to contact me at adam@seemoreenergy.co.uk . Outlook Even though the month has ended with sharply rising prices and growing fears surrounding energy supply, the outlook isn’t all doom and gloom. Initial long-term weather forecasts have shown that – while this winter may be colder than the previous year – it is anticipated to be milder than the average winter. With reserve levels looking healthy and Norwegian gas supply resumed, there doesn’t appear to be any need for fearmongering. While prices may be set to go higher on the news of further conflicts, there are reasons to be optimistic about the direction of energy prices beyond the coming winter. In 2025 we should see more LNG available to the market as new supplies (particularly in the US and Qatar) come online. And, whilst there may have been a false-start this month, any positive news regarding the replacing of Russian gas flows would also have the potential to significantly lower prices. If your business requires advice with its energy procurement, management, or planning, then don’t hesitate to contact Seemore Energy to speak to experienced advisors who can help you with bespoke strategies and advice that is tailored to your needs.