CEO of Centrica: Wholesale Market Swings "vastly more significant" than Retail Price Margins

In an article in today's (15 April 2008) Guardian titled "Gas Costs: The Bigger Picture", Centrica's Chief Executive, Sam Laidlaw, states that:

"...wholesale figure, which all suppliers have to pay, is the real driver behind price changes for consumers, representing 50% of the total cost to the customer"

and that:

"...swings in the wholesale price of well over 50% are vastly more significant in relation to what customers pay than a movement of a couple of percentage points in retail price margins."

He also asserts that the linkage of European gas prices to the price of oil, which has reached record levels recently, and the time-lag associated with the pricing mechanisms could lead to still higher prices in the winter.

The overall increase in energy bills is stated as being "...born of intense volatility" in the market. 

Office for National Statistics - Record Rise in Manufacturer Costs to Over 20% in March 2008

High fuel prices, which are continuing to increase, are cited as one of the main drivers for the record increase in Manufacturer's Costs seen in March'08. 

http://www.statistics.gov.uk/CCI/nugget.asp?ID=248

Expansion of EU-ETS Trading

UK businesses, with government support are looking for an expansion of the EU Emissions Trading Scheme.

The Environment Secretary David Miliband confirmed: "Emissions Trading is a crucial part of our efforts to tackle Climate Change. It already covers nearly half the carbon emmitted in the UK. We were right to push for ambitious caps last year and we want to continue to offer ambitious leadership within the EU. This is why it is important that EU-ETS proves to be effective

If you are affected by EU-ETS legislation, or want support to reduce carbon emissions, call Quantum Energy Limited for assistance.

EU agreement on climate-renewables by 2020

The European Council of Ministers have reached a binding agreement to increase electricity from renewable sources by 20% along with a corresponding 20% cut in greenhouse gas emmissions.

The target, based on 1990 emmission levels, is to be achieved by 2020, applying EU wide targets as part of three major objectives:

1. Increased security of supply
2. Affordable and stable energy costs
3. Combating Climate Change

In conclusion, agreement was reached confirming that a post 2012 agreement to succeed Kyoto needed to be lauched at the end of this year and completed by 2009. Support was also shown for the notion that developed countries should reduce their emmissions in the order of 30% by 2020, and by 60-80% by 2050, provided that other developed countries commit themselves to comparable emmission reductions.