Partner Article

Crisis in Ukraine prompts call for ‘home-grown’ energy supply

The ongoing situation in the Ukraine prompted an initial spike in oil and gas prices, and while they quickly settled down, it nevertheless highlighted trepidation on the energy markets - Russian imports account for 30% of gas and 35% of oil imports to Europe.

It led Energy Secretary, Ed Davey to warn that a prolonged crisis could push prices up, and to make a call for Britain to embrace and develop ‘home grown energy’ alternatives rather than remaining dependent on other nations for fossil fuel supply.

It is an idea which, in our experience, many clients are starting to get to grips with. We are increasingly advising on projects that lead towards greater levels of self-sufficiency because, true to form, our Energy Index has tracked an overall upward trend in energy prices over the last 12 months.

Our latest available data shows that energy prices in the fourth quarter of 2013 increased by 5.1% over the previous quarter. Bucking the downward trend, the past 12 months saw an overall 5% increase in real terms, from Q4 2012 to Q4 2013.

We developed the Lorien Energy Index to monitor the overall cost of energy for business users. We produce it quarterly, and it enables companies of all sizes to make sense of their current energy consumption and look at ways they can make savings in the future, by being energy efficient and using low carbon and renewable technologies to boost energy security.

Earlier this year, British wholesale natural gas prices hit a two-and-a-half-year low, as warm weather continues to drive down demand, while the impact of escalating tension in Iraq spilled over to energy markets, pushing crude oil prices to a 10-month high earlier this month.

What is clear is that wholesale energy prices will always be at the mercy of global crises such as those in Iraq and the Ukraine, and looking to the future, projects which lead to greater levels of self-sufficiency will reap considerable rewards for those forward-thinking enough to invest in them.

By Tom Jordan, Environmental Consultant at Lorien Engineering Solutions

This was posted in Bdaily's Members' News section by Amy Tarrant .