Tuesday 21 June 2016

Uncertainty in energy market due to Brexit – Y report

Uncertainty in energy market due to Brexit – Y report

The EU referendum is adding uncertainty to the energy market in the UK.

It is also one of the main drivers for gas and power prices, according to Inenco's Y report.

Customers who are looking to place fixed price contracts are more at risk, according to Energy Trader Dorian Lucas.

He added: "So leading up to the UK referendum if you are in a position where you could fix out before it, you’d be potentially beneficial to do so and potentially you’re going to see a lot of volatility regardless of what the outcome of the vote is so looking to place early could potentially mitigate some of that risk."

[youtube url="https://www.youtube.com/watch?v=l6t_qsMvkus" width="575" height="323"]


Customers looking to place flexible contracts should consider their hedge levels.

Mr Lucas went on: "If you've already got quite a high hedge there will be not really that much benefits in placing more before the referendum however if you’ve got quite a low hedge and you're trying to mitigate some of the risk, increasing hedges leading up to referendum is potentially going to offset some of the uncertainty in price volatility we could see going forward."

The power system is comfortable as 1GW of nuclear capacity has come online this week and renewable generation is "stronger".

Gas prices have fallen due to an oversupplied system.

Written by

Bruna Pinhoni

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