npower energy market update – 2011 so far…

The first six months of 2011 have been a turbulent time for the world’s energy markets, according to the most recent update from energy supplier npower.

Delivered from npower’s industry-first Optimisation Desk by expert Magali Hodgson, npower’s market update report helps businesses understand market movements and manage their exposure to energy price and volume risks.

Magali Hodgson comments: “There have been two distinct trends over the first half of the year. To start with, the energy complex was very strong as a result of political unrest in the Middle East and North Africa which introduced risks to world supplies and Brent oil prices to rise. On top of this, the situation in Japan added to the bullish sentiment in the worldwide fuel complex and greatly affected confidence in nuclear generation, leading to Germany announcing its complete withdrawal from nuclear generation by 2022.

“This saw strong UK power price increases on the curve resulting in Winter ’11 baseload contracts peaking in early April at £62/MWh - £12/MWh up on the beginning of the year.

“However, at the start of Q2 the market turned and began to look more bearish. This was a result of discouraging economic data from the US, China and India; weak Eurozone stability from the size of the Greek debt coupled with concerns about Portugal, Ireland and Spain’s economies; and the UAE releasing 60 million barrels of crude oil to compensate for the previous reduced supply.

“The curve power contracts lost a lot of the previous gains recorded earlier in the year. At its lowest, Winter ’11 baseload contracts fell to £55.3/MWh.”

Hodgson continues: “Carbon had a bullish influence on power prices between March and June due to heavier reliance on fossil fuels following the German nuclear shutdown announcement and the UK government’s introduction of a carbon floor price.

“However, July saw carbon prices tumble from more than €17/tonne to around €12/tonne due to the announcement of new EU efficiency legislation to cut demand coupled with anticipation of the European investment bank releasing 300 million new EUA certificates. This gave a bearishness to carbon which had a downward pressure on both power and gas prices.

“It will be interesting to see how carbon legislation, as well as any new or ongoing global influences affect energy markets during the second half of the year.”

npower’s market update is just one element of its integrated approach to customer support. It is one of npower’s portfolio of risk management tools and services to help businesses manage their energy purchasing.

The npower Optimisation Desk is a unique service and provides businesses using flexible purchase energy contracts with access to information on the UK wholesale energy market and up to date advice on an individual basis.

The npower energy market updates are filmed on a fortnightly basis by independent news agency, Energy Live News.

For more information and to access the updates go to http://www.npower.com/Corporate/Risk-management/Market-update/index.htm.

To suggest a market update topic of interest or to discuss its content, please contact Magali Hodgson at npower by emailing I&C@npower.com.

Find out more about npower Business by viewing their company profile, here.



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