irelan ’s low co t energy · gas commodity - wholesale market ireland • 90% of ireland’s gas...
TRANSCRIPT
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Irelandd’s Low C
osst Energy PProvider
10th Nov 08
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Contents
Ireland • Price Increase’s Low C
os
• Market Structure• Price Setting Process
st Energy P
• Underlying costs and trends• Summary
Provider10
thNov 200
www.bordgaisenergysupply.ie2
08
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Price Increase
Ireland 3.9% Average Increase’s Low C
os
Domestic (Standard Domestic Rate)4 2%
st Energy P
• 4.2%• €6.30 (inc VAT) increase on average bill
Provider
SME (Medium Business User Rate)• 2.8%• €17 (inc VAT) increase on average bill
10thN
ov 200
• €17 (inc. VAT) increase on average bill
www.bordgaisenergysupply.ie3
08
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Latest EU Tariff Analysis
Ireland
y
Medium Residential Customer’s Low C
os
Medium Residential Customer 5.6 Mwh < Consumption < 55.6 Mwh
25
30
ncl)
st Energy P
Average: 17.28
15
20
J (A
ll ta
xes
in
Provider
5
10
PPS/
Euro
GJ
10thN
ov 200
0
P
www.bordgaisenergysupply.ie4
08
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Market Share
Ireland’s Low C
os
BordGáisE
st Energy P
EnergySupply39%
Provider
Others61%
10thN
ov 200
www.bordgaisenergysupply.ie5
08
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Market Segments
Ireland
g
Power - Unregulated
’s Low C
os
LEU - Unregulated14%
4%1%
st Energy P
RTF - Price Regulated
FVT Price Regulated69%9%
4%
Provider
FVT - Price Regulated
SME - Revenue Regulated
3%
10thN
ov 200
Domestic - Revenue Regulated
www.bordgaisenergysupply.ie6
08
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CER Price Setting Process
Ireland
g
• 5 Year Revenue Review ’s Low C
os
• Annual review – option for mid year review
st Energy P
• Bord Gáis Energy Supply apply for price change
Provider • Open, Transparent and Consultative approach
10thN
ov 200
www.bordgaisenergysupply.ie7
08
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What makes up your gas bill?
Ireland
p y g
Gas Commodity
8%
’s Low C
os
Gas Commodity
Transmission Tariffsst Energy P
Transmission Tariffs
Distribution TariffsProvider
Retailers Costs
10thN
ov 200
Profit Margin
www.bordgaisenergysupply.ie8
08
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Gas Commodity - Wholesale Market
Ireland
y
• 90% of Ireland’s gas requirements sourced in UK’s Low C
os
• Since 2005, the UK is a net importer
st Energy P
• This links UK prices with European prices
Provider
• Many price drivers:– Weather patterns, – Demand
10thN
ov 200
Demand, – Production flows, – Electricity markets,
Oil & coal prices etc
www.bordgaisenergysupply.ie9
08 – Oil & coal prices etc.
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Gas Procurement – Market Benchmark
Ireland
Smoothed Gas Cost = Laddered Approach
140000’s Low C
os 100000
120000
st Energy P 60000
80000
100000
Provider
20000
40000
60000
10thN
ov 200
0
20000
Oct - 1 Yr. Nov - 1 Yr. Dec - 1 Yr. January February March April May June July August September October
www.bordgaisenergysupply.ie10
08
Pricing
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2008/09 Gas Year Wholesale Pricesf O t b 2007 O t b 2008
Ireland
from October 2007 – October 2008
Current Gas Year Prices
’s Low C
os
90
100
110
Winterst Energy P 70
80
90
/ther
m
Winter Contract
Provider
50
60
p/
SummerContract
10thN
ov 200
30
40
Oct-
Oct-
Oct-
Nov-
Nov-
Nov-
Dec-
Dec-
Jan-
Jan-
Jan-
Feb-
Feb-
Feb-
Mar-
Mar-
Apr-
Apr-
Apr-
May-
May-
Jun-
Jun-
Jun-
Jul-08
Jul-08
Jul-08
Aug-
Aug-
Sep-
Sep-
Sep-
www.bordgaisenergysupply.ie11
08
07 07 07 07 07 07 07 07 08 08 08 08 08 08 08 08 08 08 08y08
y08 08 08 08
g08
g08
p08
p08
p08
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Gas Commodity
Ireland
y Historic and Forward Wholesale Gas Price in p/th at the NBP
110120
Stg p/th
’s Low C
os
708090
100110
st Energy P 40506070
Provider
0102030
10thN
ov 200
Jun-07Oct-
07Feb
-08Jun-08Oct-
08Feb
-09Jun-09Oct-
09Feb
-10Jun-10Oct-
10Feb
-11Jun-11Oct-
11Feb
-12Jun-12Oct-
12Feb
-13
Historic Month Ahead Actual Prices Forward Curve 13th Oct 2008
www.bordgaisenergysupply.ie12
08 Historic Month Ahead Actual Prices Forward Curve 13th Oct 200812 Month MA
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Changes in Forward Prices
Ireland
gUK NBP Forward Curve Comparison (Oct 07, Jul 08, Oct 08)
120
’s Low C
os 80
100
st Energy P
60
p/th
erm
(stg
)
Provider
20
40 Winter 08 Summer 09
19 Oct 07 49.62 42.67
4 Jan 08 59.08 49.13
10thN
ov 200
0
3935
6
3941
7
3947
9
3953
9
3960
0
3966
1
3972
2
3978
3
3984
5
3990
4
3996
5
4002
6
4008
7
4014
8
4021
0
4026
9
4033
0
4039
1
4045
2
4051
3
4057
5
3 Jul 08 109.74 94.75
10 Oct 08 82.33 67.97
www.bordgaisenergysupply.ie13
08
FC on Oct 15th 2007 FC on July 15th 2008 FC on Oct 15th 200
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Brent Crude Oil
Ireland
130
150
’s Low C
os 110
130
st Energy P
90
Provider
70
10thN
ov 200
50Jan07
Mar07
May07
Jul07
Sep07
Nov07
Jan08
Mar08
May08
Jul08
Sep08
www.bordgaisenergysupply.ie14
08
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Ireland
NBP Winter 2008 (LHS) v Brent Crude (RHS) to Date
120pence/therm
160USD/barrell
’s Low C
os
100
120
140
st Energy P 60
80
80
100
Provider
20
40
40
60Norwegian Restriction in
Supply
10thN
ov 200
0
20
01/10/07 01/11/07 01/12/07 01/01/08 01/02/08 01/03/08 01/04/08 01/05/08 01/06/08 01/07/08 01/08/08 01/09/08 01/10/080
20pp y
www.bordgaisenergysupply.ie15
08
NBP Winter 2008 Brent Crude
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Gas Transportation
Ireland
p
• Subject to regulatory review
’s Low C
os
• Regulated charges applied to all suppliers equally• Small reduction in transmission charges • Small increase in distribution charges st Energy P
g• Overall transportation charges remain constant
400450500
min
al)
Provider
200250300350400
r Cus
tom
er (N
om
10thN
ov 200
050
100150
2004/05 2005/06 2006/07 2007/08 2008/09
€ C
ost P
er
www.bordgaisenergysupply.ie16
08
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Supply Operating Costs
Ireland
pp y p g
70’s Low C
os 50
60
(Nom
inal
)
st Energy P
30
40
50
Cus
tom
er (
Provider 20
30
Cos
t per
C
10thN
ov 200
0
10€
2004/05 2005/06 2006/7 2007/08 2008/09
www.bordgaisenergysupply.ie17
08 2004/05 2005/06 2006/7 2007/08 2008/09
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Profit Margin
Ireland
g
• 2003 - 1.3%’s Low C
os
• 2007 - 2% f
st Energy P
– to reflect competitive market environment
• 2008/09 2 9%Provider
• 2008/09 – 2.9% – 15% of the gas price volume risk.
10thN
ov 200
• BGES proposes to maintain the margin at 2% subject to the agreement of the CER.
www.bordgaisenergysupply.ie18
08
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Recap- What makes up your gas bill?
Ireland
p p y g
Gas - Wholesale Market’s Low C
os
Benchmark
Transmission - Regulatedst Energy P
charge for all suppliers
Distribution - Regulated chargefor all suppliersProvider
for all suppliers
Retail - Regulated with 3%Efficiency Improvement
10thN
ov 200
y p
Profit Margin - Regulated 2%
www.bordgaisenergysupply.ie19
08
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Supplier Costs – Mitigation Factors
Ireland
pp g
• Margin’s Low C
os
• Margin– Should move to 2.9% – BGES proposed to maintain current arrangements 2%st Energy P
• K-Factors– BGES foregoing €15.6m recovery of 2007/08 costsProvider
R d d th J 1st bill i f
10thN
ov 200
Reduced the January 1st bill increase from approximately 10% to 3.9%
www.bordgaisenergysupply.ie20
08
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Bord Gais & Fuel Affordability
Ireland
y
• Advocates accelerated implementation of the Pre Payment’s Low C
os
• Advocates accelerated implementation of the Pre-Payment Metering programme
W k l l ith t t d l t i th t id
st Energy P
• Works closely with state and voluntary agencies that provide advice support services
Ad t th ti h ki t t l ith
Provider
• Adopts a sympathetic approach, working out payment plans with customers experiencing difficulty
P i i i h G F E Aff d bili
10thN
ov 200
• Participates in the Government Forum on Energy Affordability
• Contributed €2.4m to the Home Energy Saving Scheme
www.bordgaisenergysupply.ie21
08
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Ireland Natural gas - still the most cost effective fuel’s Low C
os
Natural gas - still the most cost effective fuel
Also:Cl b i i t ll f i dl
st Energy P
– Clean burning, environmentally friendly, energy source• 30% & 50% less carbon emissions compared to oil and coal respectively
– Convenient – piped underground – no storage requiredProvider
p p g g q
– Payment in arrears
– Online Account Management
10thN
ov 200
– Charges can be smoothed over the year [Winter Saver Tariff]
www.bordgaisenergysupply.ie22
08
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Irelandd’s Low C
os Thank You!st Energy P
Thank You!
Provider
10th Nov 08