"We cannot be complacent about energy”, warns energy expert

The news last week that global carbon emissions remained stable last year even though the economy grew was welcomed in all quarters. “But,” says Jes Rutter, JRP Managing Director, “this is not a signal for us all to take our foot off the energy efficiency pedal.”

Posted on 17 March 2015.

“My concern is that combined with the lower energy prices that we are seeing currently, this news will induce a level of complacency about the supply and environmental impact of fossil fuels that we have been fighting to combat over the last two decades.  Further news of anticipated reductions in the price of natural gas only stands to increase this complacency.”

The 2008 Climate Change act commits the UK to reducing emissions by at least 80% in 2050 from 1990 levels.  The last report in July 2014 stated that emissions in 2013 were 12% lower than 2007 and 28% below their 1990 level.

Jes comments, “This shows that good progress is being made but we have to remember that we are only slowing the damage that we are doing to the environment, not stopping it, nor indeed reversing it.  Just last week, NASA's Earth Science News Team reported that the spring thaw in the Artic is typically arriving 2-3 weeks earlier that it did 20-30 years ago, which has a massive impact on the ecosystems of the region. ”

“We must continue to focus on conserving our limited natural resources and reducing our carbon footprint.  Luckily, this also makes sound business sense even with current lower energy prices, which will not be sustainable in the longer term anyway.”

Energy Market Update


This time last year Brent crude oil was priced at more than $100/bbl, today it is just below $60/bbl having fallen to as low as $46 / bbl in mid January 2015 but recovered a little due to high cost of production supplies, including some shale oil fields in the US, being shut in. The short to medium term outlook is for prices to remain around $60/bbl as growth prospects for world economies, perhaps with the exception of the US, continue to be held back. Russian supplies to Europe through Ukraine appear to be holding up despite the ongoing tensions and sanctions applied by the West.

Petrol and diesel prices at UK forecourts have seen a significant drop but the proportion of the pump prices to cover HM Government fuel duty and VAT is such that the ‘signpost’ price has only fallen by c.25%.


Current prices have fallen back even further in recent times to less than $60/tonne for API2 quality for calendar 2016 due to weakening worldwide demand especially in China where February 2015 imports were the lowest for over four years.

This further reduction in price has encouraged some U.K. electricity generators to increase their coal use, yet again, and potentially bring forward the closure of some plants under the EU Large Combustion Plant Directive which does not allow operation beyond 2015 if the total operating hours reach a given level.


According to a report published in the Telegraph on 15th March, a glut of liquefied natural gas may be next to flood energy markets, causing prices to fall in the way oil has.

Tanker deliveries of Liquefied Natural Gas (LNG) from Qatar into the Welsh port of Milford Haven  are becoming an increasingly familiar sight as production of the energy source rises and traditional destinations such as Japan and S.Korea, where prices are lower than those currently being experienced in W.Europe, take supplies from developing sources.   The supply glut which has led to a 50% slide in oil prices over the past year will begin to grip the other major hydrocarbon product vital to global economies, LNG. Whilst supplies from Norway and the Netherlands have not been as robust this winter due to problems with the giant gas field, at Groningen in Northern Holland where minor earth tremors have been felt, together with a series of technical problems at Norwegian fields and platforms, this year will see new LNG production flooding on to international markets.  This is as a result of several major projects in Australia finally come on stream after years of development and hundreds of billions of pounds invested. 


Winter 2015 Base Load prices are currently at c. £ 46.67/MWh, compared to the price for this same period a year earlier, which was at £ 54.3/MWh. This reduction in price of c.14% reflects the lower costs of both coal and gas as fuel for power generation. The other significant contributor to the UK generation mix is nuclear which provides c.25% to the overall output and is not affected by input fuel prices.

Despite all the usual hyperbole in the UK press the lights did not go out this winter nor did we come close to any form of rationing. This was probably due to National Grid securing sufficient contracts to support demand side response, although it is understood that the prices for this service were not overly attractive. They, National Grid, are thought to be looking to secure contracts for more than double the volume secured for the current winter when they seek offers for the winter of 2015/16. This because, as stated in previous newsletters, a number of coal fired plants will have to be retired by the end of this calendar year under the EU LCPD.