📉 Energy wholesale costs are down by 40% ⬇️ gracegausden93 explains how this impacts household bills
Energy wholesale costs for this summer have fallen by as much as 40 per cent in the past month, thanks to warmer thanThe cost of buying energy for summer 2023 was £307.97 per megawatt-hour as of the 9 December – energy companies buy their energy ahead of time – but now sits at £175.45 per MWh. This is a drop of just over 40 per cent, according to data from Auxilione, an independent energy consultancy.
Most companies will be unable to benefit from this drop as they have already bought their energy for the summer, however, it still highlights a significant drop inThe reduction in prices has been a result of the mild weather that has reduced pressure on the storage of gas, with levels steady over the past three weeks, at a time of year when countries normally tap their reserves, which means you then have to then pay a higher price to replace the reserves.
People and factories in East Asia have been using less energy because of high prices, which has lowered demand. With no significant cold spell expected in the coming weeks, this gives some level of comfort as to potentially needingTony Jordan, of Auxilione, an independent energy consultant, said: “This is important as we will be fully reliant on gas flows heading toward Europe for the first time ever after the loss of Russian piped gas. Of course,this would probably impact the European market and more so if we also need the supply.
“Right now it’s a ‘watch and wait’ moment. The market has some short-term relief factors that would suggest we have the opportunity to manage prices into the summer, but at the same time any global event could push us off course and introduce volatility.”
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