graham cooke setting my energy budget for 2020

Graham CookeSetting my Energy Budget

for 2020

November 2019

Brief Running

Order

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▪ Timing is Everything

▪ Current Market

▪ What happens next ?

▪ Price Components

▪ Fundamental drivers

▪ Context

▪ Your Choices

▪ What should it be ?

Timing is

Everything

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▪ Indicative Budget Forecast

▪ Consultation process (emails or calls)

▪ Price notification?

Current

Market – TO

BE UPDATED

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• A very healthy supply of Gas flows throughout the month was arguably the biggest factor in helping the markets fall.

LNG played a major part with a vessel docking an average of every three days over May.

• A sharply falling Oil and Coal market (down 11% and 7% respectively) has pushed prices down. The ongoing trade war

between China and the US has had very negative influence on the price of Oil with a growing concern of a global

economic slowdown.

• For the first time in history, the UK operated a whole fortnight without any coal generation. The record was broken

twice over in May and is a strong indication that Coal is not far off being phased out completely in the summer

months.

• We also broke our solar record this month, with one day seeing over a quarter of the country powered by solar.

The overall monthly outturn for May has seen the typical price of a 12-

month contract decrease by 3.5% for gas and 3.8% for

Power.

Current

Market – YTD

UPDATE

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Previous contract secured Review

2016 All good things must come to an end

2017 Part of the pain – hindsight is a wonderful thing

2018 Worth the gamble - flex recommendation performance

2019 Did you go longer term?

What

happens next

?

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Higher or Lower ?

What

happens next

?

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?

What

happens next

?

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Price

Components

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▪ To understand more about what non commodity charges are you can check out our Ultimate guide to non commodity costs on our website. https://www.zenergi.co.uk/latest/the-ultimate-guide-to-non-commodity-costs-what-how-and-why-2019/

▪ Ofgem are conducting a review of three of your non commodity costs as part of its Targeted Charging review which is expected to take effect from April 2021. These three charges make up more than 25% of your bill

▪ If you are buying a contract that extends beyond 31st March 2021, be sure to check the suppliers Terms and Conditions as you’ll want to know if these charges will be ‘passed through’ to you once they are known

https://www.zenergi.co.uk/latest/the-ultimate-guide-to-non-commodity-costs-what-how-and-why-2019/

Fundamental

Drivers

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▪ Market Watch > we don’t know what’s going to happen tomorrow

▪ Our view will change and we collectively have to adapt

▪ Volatility is clear During September alone we saw prices rises of over 10% within day on

several occasions

▪ Outlook

▪ To be updated at the time

▪ Is the risk greater than the potential benefit ?

Context and

choices

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▪ Investment return range

▪ YOUR BUDGET is KEY

Lets consider your options

▪ Needs to be lower > take a risk with flex

▪ Take control > Strategy workshop with flex

▪ Happy to adjust to current > Traditional fixed tender

▪ Keen on adjusting only once > look at 3, 4 or 5 year options

What should

it be?

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▪ Who just uses the same figure every year ?

▪ Who last purchased in 2017 ?

▪ Who last purchased in 2018 ?

▪ Who last purchased this year ?

▪ What control do you have ?

Give lowest date percentages for each

scenario

graham cooke setting my energy budget for 2020

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