Spring Budget 2024: are spending promises there to be broken?

Welcome to the February issue of Energy Bulletin. This is your monthly round up of all the latest news to help you to navigate the complex energy market, providing you with helpful insight so you can plan your energy strategy in the most effective way possible.

In this edition of, we cover:

• A view from our Director of Commercial, Ben Whitelam : ahead of the Spring Budget, Ben looks at whether previous spending pledges have been broken
• Energy update: Capacity Market auction results
• What to read and watch this month

A view from our Director of Commercial

The 2024 Spring Budget looks set to be a crucial one, setting out the government’s spending plans ahead of the General Election later this year, with some commentators noting that pre-Election Budgets tend to bring out the generous side in Chancellors, keen to entice potential voters.?

Ahead of the Chancellor’s Speech on Wednesday 6 March, Ben looks back over previous spending pledges, and whether they have come to fruition or been scaled back - in his new blog here .

Energy update: Capacity Market auction results

A key aspect of managing the UK's energy system is ensuring we have enough capacity to produce the power we need. One mechanism that supports this is the Capacity Market.

Do you know how many Capacity Market auctions there are each year, whether the outcome of the T-1 auction last week was good news for businesses, and what impact this will have on energy invoices?

Here, Piotr Czarniecki answers these three key questions

While T-1 cleared at a reasonable ￡35.79/kW for 7.6GW of capacity for winter 24/25, the price for T-4 was a record ￡65/kW for almost 43GW. This is just shy of the 44GW target, which consumers will be paying for come 2027/28.

This represents good-value prices in the short-term. But there are higher prices to come for future energy security. And with so many variables in the energy market, it's hard to really quantify the longer-term impact at this stage.

Three key things to read and watch

What is RIIO – and how does it impact my energy costs?

It is important for network companies to engage with their customers - end users, generators, shippers, and suppliers - and other stakeholders more effectively in order to understand their needs and how they may change in the future.

However, with so much uncertainty, the network companies will need to plan for the long term, anticipating future demand and responding accordingly.

In order to encourage this behaviour, the RIIO model rewards innovation and sets a long-term framework to encourage network companies to be more flexible and forward-looking.?

Here, Niall Coyle explains what it is and how it impacts the cost you pay for your energy.

Next week, we'll publish Niall's Q&A, so keep an eye on our LinkedIn page.

Energy Insight webinar

With so much change in the energy landscape, finding the time to understand how this impacts your business can be difficult. That's why we're hosting a key energy briefing on Thursday 14 March at 1:30pm, which includes:

• Spring Budget: reviewing the main energy-related announcements from the government’s latest Budget – and how they could impact UK businesses
• Wholesale energy update: Ben Reade from Cornwall Insight will highlight the key emerging trends and what these mean for businesses as we navigate the coming seasons
• The rise and fall of industry charges: while the share of these costs are growing, we’ll explain which charge is set to fall, as well as those rising at the fastest rates
• Renewable capacity: the UK needs to dramatically expand its renewable energy capacity to hit net zero – how can businesses support this and reap the benefits?

Spaces are limited, so secure your place here .

ESOS compliance may now impact your business

In a recent poll on LinkedIn, 50% of our respondents said they feel the Energy Saving Opportunities Scheme (ESOS) is just another box-ticking obligation.

While it might sound like a time-consuming mandatory requirement, complying with ESOS can also be an opportunity, as it can help your business to better understand your energy use, become more efficient – and also start mapping a path towards net zero.

But, did you know, there are changes to the next phase of the Energy Saving Opportunities Scheme (ESOS)??

If businesses didn’t meet the criteria before, they may do now, so don't miss the upcoming deadline and potential penalties for non-compliance by watching Gareth Metcalf ’s short video below.

You can also read more about ESOS in our new blog .

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