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US pledges emissions cut by 2025

The US has taken big steps towards tackling climate change by pledging to cut its carbon emissions by 26%-28% by 2025. The target was submitted by the Obama Administration on the United Nations Framework Convention on Climate Change (UNFCCC) deadline yesterday.

It is expected that the US will announce plans to cut emissions by 80% by 2050 and with the European Union previously announcing it will cut its emissions by 40% by 2030 it is clear that the worlds super powers are starting to take climate change seriously.

Energy Reforms Enacted by the Government

The UK’s coalition government over the past five years have been supporters of the shale industry, passing the Infrastructure Act on the 12th of February which made it a lot easier for shale companies to begin drilling and contained a number of key points for the energy se

Solar Energy Booming in the UK

The falling price of solar panels has meant a huge increase in the use of solar energy in recent times. It has been predicted that solar energy will account for 4% of the UK’s overall energy usage by 2020.

The increased use has caused the government to end its subsidies for solar projects that they count as large-scale, a move that has came under a great deal of criticism. Critics state that the end of subsidies could cause the market to become uncompetitive and make it even harder for solar power to compete with fossil fuels.

Glasgow Gets Green Light for LED's

Glasgow has been given the go ahead to convert 10,000 of its street lights to LED's thanks to the government-backed Green Investment Bank. 

The new LED Lights will use at least 50% less energy and will emit a much whiter light than the current bulbs. This will also come as a relief to people living in the countryside, as almost all of the light emitted by LED lights goes downwards, causing less light pollution. Normal street lights lose almost a third of their light upwards into the night sky.

Rising energy costs in the pipeline

The energy sector, throughout 2014, maintained its importance to the political agenda, with the parties continuing to debate the cost of the government’s energy and climate policies.

While policy mechanisms intended to drive decarbonisation and ensure security of supply add costs to households’ energy bills, the government expects that by 2020 its interventions will mean that domestic consumers are paying less than would otherwise have been the case.

Third party charges set to rise

Suppliers have some control over the wholesale cost of energy and their own costs to serve. But there are a number of additional charges – set by third parties – over which they have no control.

In real terms between 2010-11 and 2012-13 large UK non-domestic electricity users saw their electricity costs increase from around £100/MWh year to nearly £140/MWh year – largely as a result of increases in third party charges.

This trend looks set to continue into the near future. In 2015 it is expected that costs will rise by almost 10% due to increases in third party charges.

CCC charts rising energy bills

The government has set in place ambitious targets to cut carbon emissions in a bid to help mitigate the risks of climate change. It has done this by introducing a number of policies to increase energy efficiency and to incentivise low-carbon power generation. But these policies come at a cost to end consumers, who pay for the government’s schemes through their electricity and gas bills. 
The energy sector has, throughout this year, maintained its importance to the political agenda, with the Westminster parties continuing to debate the affordability of the low-carbon transition.  

Business Gas Prices

Gas prices have continued to rise this week with heightened fears of supply disruption, following a decision made by the Dutch government to cut production at the Groningen gas field. Production from the Netherlands has fallen, which has caused prices to rise from 46.5p/therm to 50.5p/therm. The firming oil prices have also contributed to the rise in price, with Brent Crude back up to around $55per/barrel. Above seasonal norm temperatures have reduced has demand which has so far prevented gas prices from returning to the highs of November 2014 when prices were at 58p/therm.

Relief Scheme Launched For Energy Intensive Users

The government has detailed how it intends to implement a new scheme intended to help the UK’s most energy-intensive industries (EIIs) cope with rising electricity costs. The proposals would see EIIs relieved of some of the costs associated with the government’s renewables schemes. But other, non-eligible companies could see their electricity bills rise as a result.

Rising costs

Business Electricity Prices

Business electricity prices started to firm this week after loosing 8.3% over the month of January to average £39.5/MWh. The fall in January was due to high wind output and a continued weak outlook for commodities weighing on contracts over the month. The falls in gas, oil and coal contracts also forced prices lower. With oil prices now on the increase and looking like they will settle around the $60per/barrel mark the electricity market has started to firm.