Plumbingsupplies24: Latest News

Uponor advances pre-insulated pipes with Ecoflex VIP Thermo

Fri, 12 Apr 2024 11:11:11 +0000

Uponor advances pre-insulated pipes with Ecoflex VIP Thermo

10.6.2021

Uponor advances pre-insulated pipes with Ecoflex VIP Thermo

Our extensive experience working on high-performance heating systems means that we know what installers and specifiers need their pipes to provide. We’ve used this expertise and insight to create Ecoflex VIP Thermo, a pre-insulated pipe that combines the highest standards of energy efficiency with advanced installation benefits. The Ecoflex VIP Thermo represents the next generation of pre-insulated pipes thanks to its ability to significantly minimise heat and energy losses. The efficiency of the product stems from its unique hybrid design which combines technology from both bonded and unbonded insulated pipes to create a solution that delivers up to 48% lower heat loss compared to unbonded pipes, and 34% compared to bonded pipes.

We have combined sustainability with functionality to achieve the perfect balance; due to its design, Ecoflex VIP Thermo simplifies the application process without diminishing reliability. The new pipes are highly flexible and durable, making them ideal for complex designs and complex projects.

With up to 60% less bending force compared to alternative solutions on the market, Ecoflex VIP Thermo can be navigated around obstacles or laid across bumpy ground without requiring additional connections. This minimises potential weak points that could lead to leaks after the pipes have been laid, ensuring long-term functionality.

Uponor’s Ecoflex VIP Thermo pre-insulated pipes are ideal for use in both local heating networks that supply individuals and where house-to-house connections are required, as well as district heating networks that are increasingly being used for large complexes and multi-residential developments.

Where efficiency and sustainability considerations are a priority, installers can rest assured that using Ecoflex VIP Thermo will provide a heating system that meets the highest standards for both. Choosing high-performance solutions is vital, especially as the pipes which connect heating systems to the buildings we live and work in can account for up to 50% of a system’s heat loss.

Another benefit of our Ecoflex VIP Thermo is that the outer diameter of the pipe is up to 30% smaller than other alternatives on the market. This means that the trenches running from a heating network to a building can be smaller, saving time and labour while also making it easier for the installer to find suitable pathways for the pipes to run.

to find out more about Ecoflex VIP Thermo. Call us on 01335372728 or visit our web address www.plumbingsupplies24.co.uk

Who Invented District Heating?

Fri, 12 Apr 2024 10:58:34 +0000

Who Invented District Heating?

The earliest examples of district heating were Roman hypocausts, a type of hot-air furnace often adapted to warm several buildings in close proximity, such as the three temples at Carnutum (Vienna). In London, district heating was introduced in 1622 by Dutch polymath Cornelius Drebbil, whose aim was to use it only to distribute heat for cooking and heating, thus reducing air pollution caused by individual coal stoves.

Is District Heating Renewable?

District heating is all about taking energy released as heat from a range of sources and connecting it to consumers through a system of highly insulated pipes. Once the heat network is in place, it can use a wide range of energy sources, from fossil fuels to waste and renewable sources such as biomass, solar and geothermal energy.

What Impact Does District Heating Have on C0₂ Emissions?

District heating reduces 517 million tonnes of C0₂ emissions per year: more than 9.3% of all carbon emissions in Europe.

Is District Heating Regulated?

In the UK, district heating schemes are not regulated and for this reason customers have no opportunity to swich heat suppliers and have a very limited right to redress should the service they receive fail to meet expectations.

Which Countries Use District Heating?

District heating is widely used in developed countries and throughout the world. However, its role is diverse across countries and its use is influenced by institutional factors and historic developments than climate conditions.

The 3 main countries that use district heating are:

Russia, which is the global leader with more than 17,000 district heating systems serving 44 million customers.
China
Japan

In Europe, it is mainly the northern, central and eastern countries that have high penetration in district heating, while Poland and Germany have the largest total amount of district heat delivery. Highest growth rates for District heating are achieved in Austria and Italy.

The Future of Heating Systems

The need for transforming the energy system has reached full momentum. With new renewable technologies being introduced regularly, district heating is naturally the future. With its ability to use a number of energy sources, including renewable and wasted energy, increases energy security, minimises environmental impact and provides affordable comfort for citizens, district heating it definitely part of the future of heating.

If you want to know more, visit our www.plumbingsupplies24.co.uk page for more information.

Scottish plumbing supplier on track to hit £7m turnover

Tue, 09 Apr 2024 14:19:30 +0000

Scottish plumbing supplier on track to hit £7m turnover

2 NOV 2023

Founders of the business, Craig Campbell, commercial director and Alan McConville, operations director had accumulated a wealth of knowledge in the industry through their work for large manufacturing merchants in senior roles for over three decades. Together, they identified a gap in the market to strengthen the relationship between merchant suppliers and the everyday tradesman, who they believed to be neglected in the industry.

On a mission to drive change in the sector, the business duo were in search of expert guidance to help turn their business plan into a reality and approached Business Gateway for support in 2018. Business Gateway was instrumental in providing support in the early stages, with both Craig and Alan attending start-up advice workshops.

These also included HR support, which helped the duo create staff contracts. Additionally, Craig and Alan spent time with a strategy expert who helped them map out a five-year plan which they still follow today.

Alan and Craig also benefitted from digital support to help build and develop a user-friendly website, which now includes an online brochure, and provides direct access to the brand’s social channels.

Motivated by the ongoing demand from their customers to have a showroom that could display the bathroom products on sale, Alan and Craig worked with Business Gateway to secure a 2023 Falkirk Council Resilience grant fund award for expansion. This £10,000 grant allowed HPP to build a new showroom at its Falkirk branch.

Since 2018, HPP has gone from strength to strength, starting with their first branch in Loanhead and later expanding its premises to Falkirk, Rosyth and Macmerry, with more branches to follow.

Alan and Craig have also expanded their staff, and now have a team of 28 colleagues, who have over 300 years of experience and product knowledge between them. The business is now on track to turnover £7 million this year.

Mr Campbell said: “After working in the heating and plumbing industry for several years, I’d acquired an abundance of industry knowledge.

“However, starting your own business in the sector can be daunting and knowing where to start can be the hardest part. Our journey would have been much harder and longer without Business Gateway’s ongoing support.”

Andrea Bradley-Priest, Business Gateway adviser, said: “We have been able to support HPP with a range of Business Gateway’s services.

It has been fantastic to watch the business expand and develop in the way that both Alan and Craig wished for in their five-year plan. I look forward to watching them continue to grow in the future.”

Grow your future plumbing supplies in Scotland with www.plumbingsupplies24.co.uk.

https://www.scottishfinancialnews.com/articles/sco...

Half of Britain’s plumbers fix botch-jobs by other Installers every day

Mon, 19 Jun 2023 14:16:45 +0000

A survey by Water Regs UK has found that more than half of plumbers say they are spending each working day fixing botched DIY jobs or other installers’ poor work.

A survey of 200 British plumbers, conducted online in April by Water Regs UK, has found that more than half (55.6%) spend every single working day fixing other plumbers’ poor work. While more than two thirds (68.8%) say they face the problem of competing with unqualified plumbers who can do the job cheaper.

Half of those surveyed (52.2%) also complained that they are fixing people’s DIY mistakes daily. Only 15% of these plumbers said they don’t have to deal with poor work from a previous plumber or faulty DIY each month. The remaining 85% of these plumbers spent one or more jobs each month fixing the poor work of others. Of those, 22.9% (or two in every five plumbers) do more than five jobs each month fixing other plumbers’ poor work.

The top three most common faults that need to be fixed because of poor work are leaks (28.5%), toilets or sanitation (21.5%) and the wrong fittings or poor-quality fittings (16.3%).

Julie Spinks, Managing Director of Water Regs UK, said: “These findings show that consumers are at risk of paying more than they need to and risk damaging their properties when plumbing jobs go wrong.

“Customers are left with higher bills than they anticipated, when they can least afford it. This also increases waiting times for everybody who needs plumbing services.

“And of course, this is potentially damaging to the overall reputation of the industry. It casts a shadow on the majority of plumbers who are honest, genuine and hardworking.

“All of these are good reasons for customers to choose a qualified plumber through the WaterSafe approval scheme. Accredited individuals and organisations have been checked to make sure they are suitably qualified and insured.

“Each year a proportion of members are audited against the water fittings regulations. Those approved are required to issue a certificate of conformity against the regulations, to provide their customers assurance.”

Original Article Credit: https://www.hvpmag.co.uk/

How to connect an Air Source Heat Pump using pre-insulated pipe

Mon, 12 Jun 2023 09:03:52 +0000

If your looking for an alternative way to heat your home or business , you may well have come across Air Source Heat Pumps!

They have increased in popularity hugely over the years , mainly due to a massive drive towards Net zero and the increase in wholesale prices of gas and electricity, although we are starting to see some redress in the market , especially in futures contracts , the price of energy is still at an all time high , and the pain is real for many.

Whilst the government has stepped in to help households , the commercial sector continues to struggle as prices have steadily increased since Russia invasion of Ukraine and the markets becoming very jittery about future supplies.

If you are going to take the plunge and invest in a Heat Pump you may be wondering how you go about connecting it , and what are the best practices, well here at Plumbing Supplies 24 we can offer you the best in class for Heat pump connection , Uponors *New Heat Pump pre-Insulated Pipe.

Ecoflex HP is a specialist pipe designed for connecting an ASHP outdoor unit to an indoor unit. The product incudes either 2x32mm < or 2 x 40mm > Twin Pexa pipe and 32mm double walled conduit for carrying power , sensor cables and heating service in one nice and neat pipe.

The specs for the product are below:

flexible, pre-insulated, self-compensating plastic pipe system produced in accordance with DIN EN 15632

Carrier pipe: cross-linked polyethylene (PE-Xa) according to EN ISO 15875

natural colour, SDR 11 (PN6),

oxygen diffusion-tight according to DIN EN 15632

New York takes big step toward renewable energy in ‘historic’ climate win

Thu, 04 May 2023 09:04:02 +0000

New York state has passed legislation that will scale up the state’s renewable energy production and signals a major step toward moving utilities out of private hands to become publicly owned.

The bill, included in the state’s new budget, will require the state’s public power provider to generate all of its electricity from clean energy by 2030. It also allows the public utility to build and own renewables while phasing out fossil fuels.

“It’s a historic win for the climate and for clean jobs,” said Lee Ziesche, organizer with Public Power New York, a coalition that has been fighting to pass the legislation for the past four years. “It’ll create a model of public power for the whole country, and it’s really showing that our energy should be a public good.”

The Build Public Renewables Act (BPRA) will ensure that all state-owned properties that ordinarily receive power from the New York power authority (NYPA) are run on renewable energy by 2030. It will also require municipally owned properties – including many hospitals and schools, as well as public housing and public transit – to switch to renewable energy by 2035.

NYPA provides low-cost electricity to more than 1,000 customers, ranging from local and state government buildings to electric cooperatives, businesses and non-profits. It also sells a portion of its power on the wholesale market, where utilities can purchase it. The legislation will require NYPA to offer low-to-moderate income customers a lower utility rate for renewable energy.

The passage of this first-of-its-kind law comes after years of grassroots campaigning by climate and environmental organizers in New York state.

NYPA is the largest state public utility in the country. The vast majority of the electricity generated by NYPA comes from hydropower: over 80%. This new legislation will require the state to phase out the six natural gas-fired plants that NYPA operates across New York City by 2030. (NYPA had previously agreed to shut down the plants by 2035.) NYPA built these “Peaker plants” in 2001 to meet energy demands during peak times – such as the hottest days of the year. The plants, which emit nitrogen oxide and carbon dioxide, are located in the Queens and the Bronx boroughs of New York City and the Harlem neighbourhood of Manhattan – the latter two of which have some of the highest asthma-related death rates in the country.

Founded in 1931 by then Governor Franklin D Roosevelt, NYPA was designed to provide low-cost electricity across New York state. More than 2,000 public power utilities operate in nearly every state in the United States, serving one in seven customers and accounting for 10% of all electricity. Nebraska is the only state entirely supplied by publicly owned utilities.

The communities closest to the NYPA peaker plants “have been expendable”, said Ziesche. She pointed out that some power plants are also built near freeways, compounding the levels of pollution nearby residents face.

Historically, when utilities are owned by investors, profits go to shareholders. But in publicly owned models, profits are reinvested in the utility’s operations. Rates on energy bills are also generally lower.

In February of this year, the cost of natural gas nationwide was 24% higher than the year prior. While many ratepayers were unprepared for the sudden bill increases, shareholders of privately owned utility companies saw astronomical profits – including those of ConEdison, which provides power to the New York metropolitan area and made over $1.3bn in profits.

When gas prices increased, “It was ratepayers who were caught in the lurch”, said Aaron Eisenberg, part of the Public Power New York Coalition. “Putting renewables on the grid in New York state makes us less dependent on gas and ensures we have a reliable source of energy provided by a trusted source that’s been around for 90 years.”

Ziesche added: “It’s important to make sure that low income communities are not paying an arm and a leg for new energy generation … People having access to affordable electricity is going to be a huge part of surviving the climate crisis. People die when it gets too hot, and if they’re afraid to turn on their air conditioners that’s a serious problem.”

The newly passed law also ensures creation of union jobs for the renewable projects, guaranteeing pay rate protection, offering retraining, and making sure that new positions are filled with workers who have lost or would be losing employment in the non-renewable energy sector.

NYPA is made up of a board of trustees appointed by the governor. A portion of the bill intended to expand the board to include members from labor and environmental justice groups did not make the final provision.

Why our energy bills are still going up even when wholesale prices are going down

Tue, 18 Apr 2023 09:04:11 +0000

The cost of energy on the market has been falling for months - but many customers are yet to benefit

Many households will have received a letter informing them their gas and electric bills are going up in April. But why are energy bills still going up at a time when wholesale prices have gone down?

In fact, both wholesale gas and electricity prices have fallen steadily since December 2022, but that drop has seemingly not been carried over into energy bills. The price cap set by regulator Ofgem, which sets energy bills for more than 80% of UK homes, is £3,280 a year as of April 1.

Like many, I received a letter this month from my supplier, E.ON, telling me that my bill is increasing from April. My electric has gone from 33.966p per unit to 33.282p so it's actually gone down. But my standing charge has jumped from 49.168p to 53.826p.

My gas has stayed the same but my standing charge has increased from 28.484p to 29.112p. It seems that energy companies are quick to pass on rising gas prices to the customer but less keen to reduce bills when wholesale costs come down. The last time wholesale energy prices were as low as now was September 2021, when the price cap was £1,277 a year - a whopping £2,000 less than it is in April this year.

I asked E.ON why my bills have barely reduced for each unit of energy and how the company can justify whacking up the standing charges. Their response was quite vague and pointed out that "throughout the energy crisis which has been caused by rising global energy prices, Ofgem has very much taken the lead in terms of setting the cap on energy prices on standard tariffs across the board".

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The E.ON spokesperson added: “We are all acutely aware of the crisis in global energy markets and the ongoing impact on customers’ bills. Following Ofgem’s price cap review, the Government announced that the Energy Price Guarantee would remain at £2,500 until the end of June to help ease the cost of living. We know these are incredibly difficult times and we urge any customer who is struggling to get in touch as there are ways we can help.”

It doesn't quite explain why things are still going up. Here is how the wholesale price of energy affects the bills consumers pay - and everything else you need to know about how these costs are worked out:

What are wholesale gas and electricity prices?

Energy firms buy the power they sell consumers from the companies that generate it. The cost they buy it at is known as the gas and electricity wholesale price. Wholesale UK gas prices are now around 137p per therm - a unit of heat - down from highs of around 590p a therm in August 2022. Meanwhile, wholesale electricity prices have dropped from 511p per megawatt hour in August 2022 to just 145p today.

Why do wholesale energy prices rise and fall?

Supply and demand affects the price of wholesale energy, as does where the power has come from. For example, the UK gets around 40-50% of its gas from the North Sea and needs to import the rest, leaving us open to big fluctuations in European gas prices. Other factors include how much gas the UK has in storage, weather conditions and the strength of the pound.

If wholesale energy falls in price, will my bill go down?

While energy bills are based on wholesale prices, they're not in real time. That is because wholesale energy costs fluctuate a lot. To get around this, energy firms 'hedge' by buying gas and electricity well ahead of when it is needed. They can do this months - and even years - ahead of when they actually need it.

It means that our current monthly bills do not reflect today's prices, but rather the wholesale cost from when the supplier first paid for the energy. So it can take a while before low wholesale prices bring down energy bills. There are several different ways of tracking wholesale costs, including the current price and the season ahead, and these all need to drop to impact energy bills.

Ofgem chief executive Jonathan Brearley said the lowering of the Ofgem price cap from April "reflects the fundamental shift in the cost of wholesale energy for the first time since the gas crisis began, and while it won't make an immediate difference to consumers, it's a sign that some of the immense pressure we've seen in the energy markets over the last 18 months may be starting to ease".

He added: 'However, prices are unlikely to fall back to the level we saw before the energy crisis. Even with the extensive package of Government support that is currently in place, this is a very tough time for many households across Britain."

Other factors that affect energy bills

For millions of customers on variable rate tariffs the daily charge for electricity and gas, applied whether you use any power or not, will leap, with some set to pay 80% more when they take effect in spring. Customers - like me - understand that the price of energy changes. But the system of delivery remains the same so it's difficult to understand how companies can justify increasing standing charges. On social media customers from a wide range of suppliers have posted reported rises of about 20p a day, or £73 a year.

Standing charges are a daily fee for gas and electricity customers and are added to your bill regardless of how much energy you use. Ofgem does not set a limit on this part of your bill – it is down to suppliers how they break down unit and standing charge prices below its overall cap.

However, it does make assumptions about how this will be done and, confusingly, publishes average standing charges on its website. These suggest that, from April 1, direct debit customers will typically pay 45p a day to their electricity provider – up from 25p a day now – and 27p a day for gas – up from 26p now. Those increases add £76.65 a year to an average bill. Ofgem also suggests the highest standing charges are paid by those who have a prepayment meter or who settle their bills by cash and cheque.

A study by National Energy Action (NEA) has revealed that for the typical customer, standing charges have increased by two thirds since the introduction of the 2019 Ofgem price cap. Adam Scorer, chief executive of the fuel poverty charity NEA, said the standing charge has been growing "for years". He added: "Despite the UK Government’s recent commitment to freeze the level of the Energy Price Guarantee (EPG) from 1 April, standing charges will reach record levels. The regulator controls how costs are passed through to consumers. We know that low-income households lose out the most from its default approach to standing charges. It is high time for change."

Finally, there are one-off factors contributing to why bills might be higher. Although the UK government confirmed it would keep the guarantee at £2,500 for another three months, customers will lose the government's £400 discount off bills, which runs out at the end of March having given households money off their bill since October.

MoneySavingExpert Martin Lewis explained in March how this would impact bills, saying: "So in practice you will pay more, just not as much more as you were paying. And especially for those with lower usage where that £66 was a disproportionate boost. Because if you're a lower user it had a bigger effect. This is going to feel a big loss when it comes to April."

More than 1m UK small businesses ‘trapped in high-cost energy tariffs’

Mon, 17 Apr 2023 09:04:20 +0000

More than 1m small businesses may be paying energy bills significantly above market rates after becoming trapped in long-term contracts fixed when prices reached a historical peak last year.

Trade groups representing businesses from metalworkers to convenience stores have joined forces to warn of a “perilous situation”.

They are calling on ministers to force suppliers to renegotiate unaffordable energy deals struck last summer or risk thousands of insolvencies that would hit jobs and the UK economy.

Around a quarter of the UK’s 5.5m small businesses – over 1m companies – may have been forced to renew their long-term energy supply contracts at the peak of the market, according to separate surveys from the British Chamber of Commerce (BCC) and the Federation of Small Businesses (FSB), including through coercion or mis-selling.

At the time many small firms struggled to find an energy deal because suppliers either refused to supply small businesses or demanded large financial deposits.

Since then market prices have fallen, and on 1 April the government cut its financial support for business, but companies are still locked into long-term contracts that will force them to pay inflated prices based on last year’s peak for months or even years to come.

In a letter to the business secretary, Grant Shapps, seen by the Guardian, the Confederation of British Metalformers (CBM) described the situation as the “biggest mis-selling scandal since PPI”.

Stephen Morley, the president of the CBM, said small manufacturers faced a “perilous situation” that could put “another nail in the coffin of the British manufacturing sector” while energy suppliers and brokers make “huge profits at the expense of UK competitiveness”.

The warning emerged weeks after the energy regulator, Ofgem, admitted that it was “very concerned” about the behaviour of some energy brokers and suppliers in relation to business energy customers.

In a letter to the chancellor of the exchequer last month, Ofgem said companies faced energy bills that are “higher than is explained by market conditions”, and in many cases have been forced to pay much higher deposits and standing charges.

Morley told the Guardian that a number of small manufacturers in the West Midlands had already gone bust since the government ended its original support scheme at the end of March, after just six months.

Small manufacturers are understood to be some of the worst affected due to their high energy use. The collapse of these firms, which make the components used by larger manufacturers, could have consequences for the UK’s supply chains, he said.

The BCC estimated over a quarter of the UK’s small businesses signed new energy contracts when prices were at their peak at the end of last summer. About 60% said they would face difficulties paying after March 2023.

Many were encouraged by the government to sign up to fixed price deals rather than tracker arrangements, meaning they were locked in to high prices.

A separate survey by the FSB found that 24% of small businesses were on fixed deals, and 320,000 may struggle to pay their bills. Tina McKenzie, the FSB’s policy chair, said firms should be given “a fighting chance” by being allowed to “blend and extend” their existing energy rates with rates that reflect lower market prices.

Chris Noice, a spokesman for the Association of Convenience Stores, said: “Thousands of our members are dealing with the short-term pain of fixed contracts that were signed in the second half of 2022, at the height of wholesale prices”.

In the absence of “meaningful” government support, ministers should “help them off these huge fixed contracts as soon as possible and on to something that better reflects the current wholesale market”, he said.

Noice said government had advised retailers and other businesses to opt for fixed price contracts, because it said the energy bill relief scheme would provide more protection to those on fixed rates.

A government spokesperson said businesses had been offered £5.6bn of support over the winter, enabling some to only pay about half of the predicted wholesale energy costs.

“Global energy prices have fallen significantly and are now at their lowest level since before Russia’s illegal invasion of Ukraine. The new level of government support reflects this welcome fall in prices, but we will continue to stand by businesses, as we have done over the winter,” the spokesperson said.

“The energy broker looked at me and said, ‘well, you can see which way energy prices are going so why don’t you fix for three years’,” explained Steve Hardeman, the managing director of the rivet maker Clevedon Fasteners. Hardeman is one of thousands of managers who were urged to sign up to long-term fixed energy supply contracts at the end of last summer when market prices were at their peak.

“There were very few contracts available at the time so we considered ourselves lucky to get the deal that we did,” he said. But today his company is locked into paying a rate of 46p per kilowatt hour for its energy, compared with a prevailing market rate closer to 28p/KWh. For smaller manufacturers the burden of overpriced long-term deals combined with the end of the government’s previous support scheme could cause them to go bust, with disastrous consequences for jobs and the UK supply chain.

“All the government has to do is allow onerous contracts to be renegotiated. It would cost them nothing and have a huge impact on small manufacturers and inflation,” he said.

Philip Ford, managing director of Hopscotch Children’s Nurseries

“We don’t have the option to say that we’re going to turn the heating down,” said Philip Ford, the managing director of six nurseries in East Sussex. “We have heard of some nurseries getting in touch with parents to ask them to send their children in with extra jumpers, but this isn’t something we’ve done.”

Ford is one of many small business owners shouldering a “massive” increase in energy costs following the end of the government’s energy bill relief scheme in March. In its place is a campaign to help small companies cut their energy use and a new discount scheme that offers little help to small businesses, many of which were forced to sign up to long-term energy supply deals when energy markets reached their peak last summer.

Ford said the decision to sign up to long-term fixed rate energy supply deals last year felt “sensible” at the time, “because we didn’t know where energy costs were going to go”. At one nursery the quarterly electricity costs spiralled fourfold to about £6,000. In total, the Hopscotch group’s energy costs have climbed from £30,000 a year in 2020 to £60,000 last year.

“We don’t want to keep putting our hands out [for government support&91;, but like all small businesses we’re struggling. There are options which could reduce the burden in other areas, such as a cut to business rates,” he said.

Ben Simons, convenience store operator

“It was a leap of faith,” says Ben Simons, the owner of four convenience stores in Gloucestershire. Simons signed a long-term energy supply contract with his supplier when wholesale energy market prices were at their peak, believing that the government’s support scheme would protect him from the worst of the cost crisis.

His energy bills climbed from 14p per kilowatt hour at the end of summer to 75p/KWh in October, almost three times the current market rate.

“It’s a major burden for those companies that just happened to be unfortunate enough to need to renew their contract in third quarter of last year. Today I would expect to get a contract at less than 30p/KWh,” he said.

“But I had little choice. If I had chosen a variable energy tariff the cost would have been eight times higher [than the previous deal&91;, while the fixed rate deal was five times higher,” he said.

Choosing the former would have put the business under in a matter of months. He also didn’t expect that the contract would last longer than the government’s scheme to help companies weather the cost crisis.

Simons urged ministers to compel suppliers to reopen long-term energy supply contracts at current market prices.

“If the government has washed its hands of direct help [for business energy costs&91; then they should help indirectly.” he said. “It’s an exceptional set of circumstances so if energy companies can do something then I think they should.”

UK energy bills to rise by over 50% in April as regulator announces hike

Wed, 23 Feb 2022 09:04:29 +0000

KEY POINTS

The U.K. has limits on how much suppliers are able to charge consumers for energy.
Britain’s energy price caps are reviewed by the government’s regulator, Ofgem, every six months.
Ofgem, the energy sector regulator, said on Thursday that its price cap would be raised by 54%, marking a record-breaking increase.

LONDON — Energy bills are set to rise drastically in the U.K. after the country’s energy regulator announced its cap on prices would rise by over 50% in April.

The U.K. has limits on how much suppliers are able to charge consumers for energy, with price caps reviewed by the government every six months.

Ofgem, Britain’s energy sector regulator, said on Thursday that its price cap — under which the average household’s annual energy bill is currently between £1,277 ($1,730) and £1,370 — would be raised by 54%, marking a record-breaking increase.

That means many households could see their energy bills rise by around £700 a year.

An estimated 22 million households will see their energy costs increase, Ofgem said.

“The energy market has faced a huge challenge due to the unprecedented increase in global gas prices, a once in a 30-year event, and Ofgem’s role as energy regulator is to ensure that, under the price cap, energy companies can only charge a fair price based on the true cost of supplying electricity and gas,” Jonathan Brearley, CEO of Ofgem, said in a statement on Thursday.

“Ofgem is working to stabilize the market and over the longer term to diversify our sources of energy which will help protect customers from similar price shocks in the future.”

Wholesale natural gas prices reached record highs in Europe last year, caused by a number of issues including low inventories and Russia tightening its gas supply to the EU, creating an energy crisis across the region that many countries are still grappling with.

But the U.K. has been hit particularly hard due to its heavy reliance on gas as an energy source.

British Finance Minister Rishi Sunak announced on Thursday that all residential electricity customers would receive a £200 discount on their electricity bills from October, which will later be repaid in £40 installments over five years.

He also announced that the majority of households would be given a £150 rebate on their council tax — a levy paid by households based on the value of their home.

Samuel Tombs, chief U.K. economist at Pantheon Macroeconomics, said in a note following Ofgem’s announcement that Pantheon now expected Britain’s electricity and natural gas consumer price indexes to rise by 39% month-to-month in April.

“This would mean that their combined contribution to the headline rate of CPI inflation will rise to 1.6 percentage points in April — 0.1 pp below our previous expectation — from 0.7 pp in March,” he said. “We continue to expect CPI inflation to peak at about 6.5% in April.”

More than 22 million British households are connected to the country’s gas grid. Britain’s largest single source of gas is the U.K. Continental Shelf, which made up around 48% of total supply in 2020. However, the UCS is a mature source, meaning it must be supplemented with gas imported from international markets.

U.K. day ahead prices for wholesale natural gas were trading at around £1.75 per therm on Thursday, up slightly from the previous day. Meanwhile, front month contracts gained around 3% to trade at around £1.89 per therm.

Day ahead prices peaked in December, when they rose above £4.50 per therm.

Almost 30 U.K. energy suppliers collapsed last year thanks to the soaring cost of wholesale gas, with those that have managed to survive the crisis urging the government to remove or raise the price cap

Bill Bullen, founder and CEO of British energy supplier Utilita, told CNBC in a phone call on Thursday that he had “huge concerns” about what might come with the next price cap review, which would impact prices next winter.

“That’s when these extra energy costs are really, really going to hit home,” he warned.

However, the prospect of rising energy bills have been concerning consumers and businesses in the U.K. for several months, with many small business owners worried that rising fuel costs could mean their companies can no longer afford to operate.

The U.K. is also facing a wider cost of living crisis, with inflation soaring to a 30-year high in January.

Taxes on earned income and shareholder dividends are also set to increase by 1.25% from April, a move which Prime Minister Boris Johnson is reported to be pushing ahead with despite pressure to U-turn from lawmakers within his own party.

‘RIP the self-employed’

Kerry Mackay, owner of Welsh sustainable sponge manufacturer ScrubbiesUK, said via email that the sharp price rise had dealt “a massive blow to businesses and people around the U.K.,” adding that she wrapped herself in a blanket as she worked to keep her energy bills down.

Meanwhile, Malcolm Baker, who breeds and sells exotic frog species, said the price cap increase “is going to kill small businesses.”

“RIP the self-employed and sole traders,” he said. “Such a massive rise will hit the pockets of lower income families and those who, like myself, are disabled and need to have constant heat in the home ... It’s go hungry to stay safe.”

Adam Bamford, CEO of Derby-based Colleague Box, said the speed of price rises had “blown us away as a business.”

“We took action over the new year to reduce the size of the sales team, which gives us some headway with costs, but it will have a long-term impact on our growth as less people equals less income,” he said in an emailed statement. “At the moment I don’t feel the Government could care any less about businesses.”

How the UK could play crucial role if Russia turned off gas taps to Europe

Tue, 22 Feb 2022 09:04:37 +0000

We examine how Europe could cope in the event Russia decided to leave some of its biggest customers out in the cold and finds post-Brexit Britain could provide the solution.

There are many unknowns in the Russia-Ukraine situation.

Will Russia invade? Will it stop short of invasion while taking other steps to destabilise Ukraine? Will it face European or American sanctions? What form would those sanctions take? And so on.

But perhaps chief among the unknowns is what might happen to Europe's energy supply.

This is no trivial question - indeed, there's an argument that it's the most important underlying question of all. Many parts of Europe - especially Germany - are so reliant on Russian gas that there's a strong argument that this reliance is what's really guiding diplomacy.

This brings us to another question: what would happen if Russia switched off the supply of gas to Europe? Would continental Europe have enough energy to power its grid and heat its homes? What about the UK; would it run short?

It is worth underlining at the outset that few people either in the energy markets or indeed in diplomatic circles expect this worse-case scenario, even in the event of a Russian invasion of Ukraine. Much more likely, in such an eventuality, would be a smaller fall in Russian gas imports to Europe.

Perhaps Russia might face sanctions which could curtail its ability to process payments for gas. Perhaps there would be disruptions to gas transiting Ukraine, one of the main routes from Russia to Europe (though not the main route, as it was a decade ago). Such scenarios might see the amount of Russian gas coming into Europe falling by some tens of billions of cubic metres.

A complete cessation of flows via its pipelines across the Baltic and across Ukraine would be highly unlikely, not least because it would cause a permanent switch in European energy trends, which, in the long run, would be disastrous for Russia and its gas producer Gazprom.

Simple matters of infrastructure

Still: it's worth asking the question, in part because while highly unlikely it is at least possible and in part because such exercises help us better understand the nature of our energy system. And because much of this comes down to simple matters of infrastructure - how many pipelines are there, how much capacity is there for getting gas in from other places and how do these factors interact with domestic demand - we can actually come to some conclusions. And they turn out to be somewhat surprising.

But let's start at the start, by reminding ourselves where continental Europe gets its gas (there is some produced in the Dutch North Sea and a few other small amounts of domestic production, but the vast majority is imported). By far the biggest source is Russia, accounting for about 47% of imports last year.

The next biggest chunk comes from Norway, still a big net exporter of gas. Some 12% comes from North Africa through pipelines that run under the Mediterranean to Italy and Spain and a smaller chunk comes from pipelines from Azerbaijan which arrive in Greece and Italy.

Once upon a time pipelines were the only way of getting large quantities of gas but these days there is also a substantial amount of gas shipped in vast liquefied natural gas containers. Most of these come into Europe in Spain and the UK, but there are also some terminals in France, Belgium and the Netherlands. The two biggest producers of LNG are Qatar and the US.

The relevance of all of this becomes apparent when we start to think about what Europe (and we're talking here primarily about countries in central and Eastern Europe - especially Germany) could do in the event of Russia stopping pipeline flows. Much of the below relies on the work of Mike Fulwood and Jack Sharples at the Oxford Institute for Energy Studies (OIES).

As of January there was just over 200 million cubic metres a day of gas flowing through the three main pipeline routes from Russia into Europe (the Nord Stream 1, the Yamal-Europe and the pipes across Ukraine). This was actually a little lower than normal demand, which tends to be closer to 270 million. Let's imagine that stopped overnight. That leaves a roughly 270 million cubic metres per day hole to fill.

What are Europe's options?

There would be broadly four avenues for Europe.

1. The first would be to try to produce more gas itself. The Netherlands, for instance, has announced plans to raise annual production at its old but mighty field Groningen from 3.9 billion cubic metres to 7.6bn cubic metres. This might help a bit, but a) it's not likely to be finalised until April, by which time who knows where we'll be and b) even once approved it would only fill a small fraction of that shortfall: perhaps about 14 million cubic metres a day. Elsewhere in the North Sea there is not much evidence that production can be increased dramatically.

2. The second avenue is for Europe to rely on the gas it has in storage. But here we run into another problem, which is that its stockpiles are at the lowest level for this time of year since 2011. Indeed, if it were to carry on running down these stores at recent rates, the stockpiles would be exhausted by mid-April. So in the absence of Russian gas it could run down the stockpiles faster, but this would mean potentially exhausting them by mid ton late March - still in the European winter. While this could potentially fill the gap, at least until the storage was empty, refilling the storage again would be very problematic.

3. The third option is to curtail energy use. In practice this means forcing or persuading factories and industrial gas users to suspend their energy intensive activities until the end of the winter. Clearly there is only so much one can reduce demand without causing serious economic harm. And no-one is seriously contemplating rationing energy to households (remember much of Europe's gas is used to heat homes in the winter). Modelling by the OIES suggests that demand could be reduced by nearly 100 million cubic metres a day, though not without some significant industrial pain.

4. The final option is to try to get more gas from elsewhere. But where? The easiest option would be more gas through the pipelines from Norway, Azerbaijan and Iran, but here you run into problem: it's not obvious they could produce that much gas. North African imports are already at close to record levels. There is an entirely separate diplomatic issue, which is that Algeria has broken off diplomatic relations with Morocco, so is not sending its gas there, which in turn means pipeline supply into Spain is lower than it would otherwise be. Pipeline supplies from Azerbaijan are effectively at full capacity already, while pipeline supplies from Norway - the best non-Russia avenue for more pipeline supply - are also unusually high. Indeed, the pipelines running from Norway into Europe were already about 83% capacity utilisation in mid-January.

That brings us to perhaps the best option to try to fill that 270 mmcmd gap: liquefied natural gas. The US is producing record amounts of LNG at the moment and while demand from Asia is high, Europe has a logistical trump card: a ship sailing from the US east coast to Europe has about half the distance to travel as it would to Asia, meaning such trips are doubly attractive (since you can do two in the time it takes to do a single round trip to Asia).

Britain's role in supplying Europe

But there is another question: how would one get enough LNG into Europe to fill that gap left by Russian gas? Here we run into some complications, the first of which is that getting gas from Spain, Europe's biggest LNG importer, to Germany, is actually quite complicated, since the pipelines between the Iberian peninsula and the rest of Europe can only carry limited amounts of gas.

How about the LNG terminals in the north of continental Europe - at Dunkerque, Zeebrugge and Rotterdam? Given these are plugged into the right part of the network, they could help bolster supplies, filling perhaps 30 mmcmd of that supply no longer coming from Russia. But that still leaves a big hole to fill. How to fill that gap?

That bring us to perhaps the most unexpected answer. That hole could be filled by Britain. The UK could send North Sea gas directly to Europe, through its pipelines, and then replenish its own gas network with LNG imported from the US, Qatar or other suppliers. There are a couple of important reasons why the UK would end up as a supplier (or rather the pipeline) of last resort.

The first is that while Norwegian pipelines are very full at the moment, running at about 83% full, the UK pipelines, exporting to Europe, have plenty of capacity left. Over the past month or so only about 17% of their capacity was being used. The second is that the UK has considerably more LNG terminal capacity - around 35 million tonnes a year, compared with about 25 million in north Europe.

Put those things together and it seems plausible that the UK would be the crucial link in what OIES calls a "land bridge" of gas to mainland Europe. And because we're talking here about an integrated market which responds to price cues, the reality is that this could happen swiftly and automatically without any government interference.

This comes down to a deeper point: even though the UK has left the EU and no longer has any legal obligation to provide gas to its European neighbours (or right to claim it off them if it ran short) the single market in gas is as integrated as it was before Brexit, and the UK remains a part of it.