Eneco market reports Mid-April 2022

Russian conflict with Ukraine

Having reacted to news about sanctions, the market has been fairly stable although volatility does remain and the market is still headline reactive. There appears to be no progress with talks aimed at ending the conflict, and certainly Putin is showing no signs of willingness to bring it to an end.

Electricity costs:

The UK government finally unveiled its energy security strategy – mainly focused on generation – with the key feature a commitment to the development of up to 24 GW of new nuclear capacity across eight plants. The strategy also includes targets for increasing offshore wind capacity. A key component is the government hope to speed up approval processes from 4 years to 1.

Limited renewable output early in the month saw prices increase whilst warmer weather has helped improve the situation. The current increased winds and a drop in gas demand should support a better market although there is a forecast drop in temperatures next week.

For more information see our full market update via the link below.


  • From April 29th 425 MW will be taken offline at the gas-fired Grain power plant for work expected to last until May 22nd, according to operator Uniper.
    In July the 965 MW Hinkley Point B nuclear reactor is due to close, having been operational since 1976.
  • Shell and Uniper have teamed up to develop a 720 MW blue hydrogen facility – using reformed natural gas and carbon capture and storage to produce the fuel – at the UK-based Killingholme power plant. A final investment decision on the project is expected in 2024 with the potential for production to commence at the site in 2027, according to the companies.
  • A new body will be created to oversee the energy network with a key focus on the transition towards net zero, it was announced in early April. The ‘future systems operator’ will be publicly owned and will take on the main responsibilities for manging the electricity network that are currently carried out by National Grid, as well as some of the gas oversight functions.
  • A £375m fund was launched to support the UK energy transition – including £100m to cover the difference between hydrogen production costs and the sale price as part of a £240m hydrogen package – in combination with the release of the energy security strategy. Other technologies that will be supported include carbon capture and storage (CCS).

Gas costs:

Members of the European Parliament (MEPs) voted to ban the import of Russian oil, gas, coal and nuclear fuel with immediate effect – although this was largely symbolic as ratification would require unanimity from all member states – while the Baltic states took the plunge and announced a cessation of pipeline imports from Russia. Control of Gazprom Germania – a subsidiary of the Russian producer that owns or co-owns more than 11bcm of gas storage capacity in Germany, the Netherlands, Austria and Serbia – was handed over to the German energy regulator, improving prospects for EU storage ahead of next winter.

On the short-term market a cold snap hit the UK through most of the fortnight – while wind output was mostly on the low side – pushing gas demand around 74mcm above the seasonal average.

For more information see our full market update via the link below.


  • Summer gas demand is expected to be around 6.5% higher than last year – according to a forecast from TSO National Grid – due to expectations of higher exports to help fill EU storage sites.
  • Norwegian summer maintenance is set to step up from April 20th with 40-60mcm of daily capacity unavailable from that date to the end of the month. Restrictions are set to ease slightly in May with 9-25mcm offline. Curtailments in Norway tend to have a greater impact on supply to the UK than elsewhere in Europe due to buyers in the country holding few long-term supply contracts with Norwegian producer Equinor.
  • A new study into the safety of fracking was ordered by the UK government, potentially paving the way for the removal of a moratorium on the practice that was imposed in 2019 following opposition from climate groups and concerns over earth tremors associated with the extraction process. The British Geological Survey is expected to produce a report within three months. Shortly after energy company INEOS wrote to the government with a request for it to be allowed to build test site to prove the extraction process can be performed safely.
  • The energy security strategy released by the government in early April included a new licensing round for oil and gas field development on the UK continental shelf that is set to take place in the autumn – the first of its kind since 2020 – with a renewed commitment to domestic production following the Russian invasion of Ukraine. Given the current price environment for both oil and gas there is likely to be strong interest in the round.

Read Eneco’s full market update here

Rolling 3-Year Gas and electricity prices to Mid-April 2022


As businesses work towards Net Zero, Eneco is looking at ways we can add value to the service we provide and support your journey. We are in talks with potential partner companies who specialise in usage analysis and Net Zero solutions. Look out for further updates on this.

Non-energy costs:
On the electricity side organisations will start seeing increases in pass through costs from both government and industry infrastructure providers due to pandemic-related demand destruction. Levies normall