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.

August Review By Adam Novakovic  As summer draws to an end, gas and electricity prices have been rising. Often the threat of colder temperatures is enough to create fears surrounding energy demand, but this year the reasons for rising prices have little to do with predicted winter usage. This article will cover the stories behind why prices rose throughout August and look at which factors are likely to impact energy prices for the remainder of 2024. Wholesale energy prices peaked on the 10 th , shortly after Ukrainian forces had crossed Russian borders and captured the Sudzha gas metering station. Initially, there were fears that fighting near the station may have caused structural damage that could impact the flow of gas into Europe. The Sudzha station is part of the only pipeline importing Russian gas into the continent, responsible for the flow of almost 15 billion cubic meters of gas per year. In spite of Ukrainian forces taking control of the station, gas flows have been reported to be unchanged, although it has spiked fears regarding the vulnerability of the pipeline. Further east, conflicts between Israel and a number of neighbouring countries have become increasingly concerning. With Iran being dragged further into the conflict -- raising concerns of prolonged hostilities in the region -- there are growing worries about the safety of LNG shipments passing through the strait of Hormuz . These fears have been keeping prices high for the past few months and until the conflict looks closer to being resolved, this is a theme likely to be re-visited for the rest of the year. Even further east, Japan and China both logged record temperatures this summer. This heatwave has led to an increased LNG demand, increasing global prices as multiple nations bid for the available supply. This has contributed to the high energy prices in the UK, but is unlikely to be a factor that has a long-term impact, especially as global LNG supply is set to increase over the coming months and years. In recent years Norway has become the number one exporter of gas to Europe. However, in August, Norwegian gas fields entered a period of crucial maintenance work. This leads to a daily reduction of gas flow into Europe that is the equivalent to France’s daily gas consumption. Whilst the maintenance is essential and had been planned far in advance -- given the factors affecting supply from other parts of the world -- the market has been sensitive to the reduced Norwegian gas flows. These are set to continue into September, although normal service should be resumed before the end of the month. Outlook Looking ahead, Cornwall Insight’s forecast for energy prices has predicted that prices will remain above the pre-2022 levels for the foreseeable future. They believe the current trend of energy prices will continue into 2025 and beyond, with geopolitical unrest being a key driver behind prices. In the coming month we can expect to get the first long-term weather forecasts that will give an indication as to how cold or mild this winter is anticipated to be. With gas reserves still at very healthy levels, anything other than a particularly cold winter would likely be positive for energy prices. As with the majority of 2024, international conflicts impacting energy production and shipping are likely to be the main factors behind short-term price movement. However, with the Asian heatwave becoming less of a factor, and Norwegian gas flows expected to resume normal service, we should see prices start to drop towards the end of the month. Whether this begins a more sustained downtrend will likely depend on the development of the previously mentioned conflicts. 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.