Weekly Market Report 18/03/22
High and volatile oil and gas prices following Russia’s invasion of Ukraine continued to strain commodity markets this week and led Europe’s largest energy traders to write to governments and central banks asking them to provide emergency assistance. The European Federation of Energy Traders said the industry needed “time-limited emergency liquidity support to ensure that wholesale gas and power markets continued to function."
It comes as Boris Johnson prepares to launch his 'British Energy Security Strategy' as he looks to reduce imports of Russian oil and gas and shield the UK from future price shocks.
Advanced briefings of the strategy, which is expected next week, suggest he will try to stimulate more supply across the board in both renewable and more traditional forms of energy. There's expected to be an expansion in the number of North Sea oil and gas licences and backing for operators who have a licence but haven’t developed their fields. At a meeting this week, he urged companies, including BP and Shell, to increase investment in future oil and gas exploration.
New targets are expected for solar and offshore wind projects which would be achieved by speeding up the slow pace of the regulatory and planning process. Government officials believe the new drive for renewables would increase solar power generation from 14GW now to 50GW of capacity by 2030 alone, which would be enough to power 15 million homes.
There is also expected to be a push to get backing for the next nuclear project - Sizewell C - as well the development of new “small modular reactors” by Rolls Royce, which are designed to cut down on the costs and risks associated with larger plants. But as this is new technology, the first modular reactor wouldn't be on stream until the early 2030s.
With energy bills set to go up by 54% for households in April and the energy price cap expected to rise to £3,000 in the Autumn, there is great political pressure on the Government to do something quickly.
Finally, as we’re sure you are aware, today is #GlobalRecyclingDay - an initiative we fully support. We all know the importance of recycling waste both at home and in technology such as anaerobic digestion.
From everyone at PPAYA, Have a great weekend!