Future Net Zero 

The success of net zero targets is dependent on improving emissions data, according to the BCS A new study done by the British Computer Society (BCS) revealed that 71% of tech experts don't feel policymakers and departments have the correct data to make net zero a reality. The study also claims that if governments and industries are not given better data they won't be able to achieve their pledges. According to the study the correct information on everything that emits carbon, from vehicles to homes and offices, must be accessible or setting net zero goals, such as those at COP26, will be pointless. 61% of those surveyed also stated that they think IT and digital technologies are not currently being used efficiently enough throughout industries to tackle climate change.

The pace at which businesses are moving towards decarbonisation is faster than the government. That’s the suggestion from Emma Pinchbeck, Chief Executive Officer of Energy UK when speaking to the BBC show Question Time about COP26.

Balancing planet and profit during unprecedented market volatility

Wholesale energy prices have experienced unprecedented levels of volatility since the end of summer 2021, with both day ahead/spot and future contracts surging to all-time highs. In the last couple of months, prices have decreased but still remain high compared to a year ago. This period of high energy prices is expected to continue for the foreseeable future (see next section). Energy prices have surged for a number of reasons: A global increase in gas demand following the ease or end of Covid-related restrictions throughout 2021. After the pandemic, economies across the world started to recover. Asian countries like China saw their imports of Liquified Natural Gas (LNG) increase. This resulted in lower LNG shipments to the UK and Europe. On the supply side, the Covid-19 lockdowns pushed some maintenance work from 2020 into 2021 at a time when demand was recovering. In 2021, gas production hit a record low of 363TWh, 47TWh below the previous record low in 2013. Low production was the result of an extensive summer maintenance schedule which saw shutdowns at several major terminals, as well as the Forties Pipeline System which serves a significant proportion of UK gas and oil production. A lack of wind in the summer resulted in higher demand for conventional power. European gas storage in 2021 and Q1’22 remained far below previous years and it’s unclear how these are going to be replenished in the summer given the concerns around supply including the potential suspension of Russian gas flows due to sanctions. The 1,234km offshore Nord Stream 2 gas pipeline, which was designed to double the flow of gas between Russia and Germany (and by extension the rest of Europe) has been abandoned following the invasion of Ukraine. Gas storage in the UK is extremely minimal with capacity at less than 2% of the UK’s annual demand, compared with 22% for other European countries. Whilst the UK is not heavily reliant on gas coming from Russia, it sources almost half it’s gas supply from Europe. Hence, wholesale gas and power prices in the UK are now subject to knock-on-effects from the conflict in Ukraine.