Market Knowhow - Energy
The wholesale energy markets were unsettled in March being influenced each day by breaking industry news. Current prices are slightly higher than those reported last month but still in comparison to historical prices, these show very good value over 12, 24 and 36 months.
The main news in March was regarding Gas storage issues, which did impact on Gas and Electricity prices and is still being built into prices as a concern, which may have a greater impact later in the year, particularly if winter 2015 sees below average temperatures.
World demand for Coal continues to decrease with further falls in the price, reaching a five year low during March. This makes the use of Coal very attractive for Electricity generation, although further losses could start to have a real impact on production levels due to the closure of unprofitable mines.
In the lead up to the general election, there have been no additional policy statements to impact on the energy wholesale markets.
During the last four months, Gas and Electricity prices have been stable following the significant decreases we saw in January. With some concern as to our Gas storage levels going into the winter and the impact of the closure of unprofitable generation, we may now be seeing the low point of wholesale prices.
lpm, in conjunction with our electricity broker, Indigo Swan, would recommend developments consider contracting supplies ending 2015 and 2016. We will continue to research your options for 12, 24 and 36 month contracts, to see what the potential benefits of these current low prices might mean for developments.