Index of Domestic Energy Supply Costs | December 2017

The Cornwall Index of Domestic Energy Supply Costs is updated monthly, tracking the costs that electricity and gas suppliers face. It is baselined to a value of 1,000 points in January 2012 and is calculated using Ofgem’s typical domestic consumption values (TDCVs) for medium users.

In December 2017 the electricity index grew by 27 points to 1,517, a strong increase after the modest 3 point rise seen in November. It brings the electricity index to the second highest level since our records began, only falling behind December 2016 when the index peaked at 1,690 points. This increase was caused by rising wholesale costs, which went up by 42 points in December. The upward pressure on wholesale costs, principally in the first half of the month, was caused by outages across Europe as well as lower generation output from renewable generation in the UK.

The overall increase was counteracted by lower network costs, most notably through reduced Balancing Use of System (BSUoS) charges.

The gas index continued to show substantial increases in December, rising 72 points to 1,100; the highest index value recorded since February 2014. As with electricity, the increase was driven almost exclusively by rising wholesale costs. Day ahead prices reached a four year high of 60.5p/therm on 12 December as a result of the explosion at Austria’s Baumgarten gas distribution hub, restricting supplies across Europe. This upward pressure on prices was further compounded by uncertainty over repair timescales for the Forties gas pipeline in the North Sea, and bullish demand in Europe and China at the start of the month, driven by colder temperatures and the gasification programme respectively.

Related thinking

Power and gas networks

Gas DSR reforms ahead of winter 2022-23

National Grid has recently carried out a review of the Gas Demand Side Response (DSR) voluntary curtailment mechanism through July and August. The Gas DSR allows shippers to offer a consumption curtailment service to National Grid Gas (NGG) during periods of acute gas supply constraint called a Gas Deficit Emergency...

Energy storage and flexibility

Network charging – what’s been going on and why should I care?

Across Great Britain there are ~810,000km of wires and underground cables that make up our electricity network. Split between the higher voltage, transmission system and the lower voltage distribution system, these lines and cables are responsible for transporting electrons up and down the country to provide consumers with the necessary...

Business supply and services

Re-balancing the balancing costs –BSUoS charges to be levied solely on suppliers from April 2023

Balancing the electricity system costs money. National Grid in its role as Electricity System Operator (ESO) takes actions in every half hour to achieve the remarkable feat of keeping supply and demand finely balanced on our national electricity system – maintaining a system which runs between 49.8 and 50.2Hz with...

Low carbon generation

What to look out for in Third Party Charges in 2022-23

In recent months, the GB energy market has been exposed to extreme volatility as wholesale prices have grown rapidly, leading to a significant number of supplier exits and questions over consumer affordability of energy bills. This has resulted in notable movement across a number of non-commodity costs (also known as...

Commercial and market outlook

Russian gas dependency and impacts on net zero

Tensions along the Russia-Ukraine border have been escalating since November last year when satellite imagery showed a fresh build-up of Russian troops on the Ukrainian border. Fast forward to the 24 February 2022, Ukraine and Russia are now at war following a Russian invasion. In response to these actions from...

Commercial and market outlook

EU Commission publishes climate change mitigation taxonomy

An excerpt from our European Weekly Bulletin, part of our Energy Spectrum Europe package. On Wednesday 2 February, the EU Commission presented its Taxonomy Complementary Climate Delegated Act on climate change mitigation and adaptation covering certain gas and nuclear activities. The commission states that it aims to prevent greenwashing and...

Heat networks

Heat and buildings strategy: Key points

On 19 October, the government released the Heat and Buildings strategy outlining how the government will tackle the decarbonisation of the built environment to help meet the UK net zero ambition. Our experts have taken a quick look at the strategy and highlighted the key points. Heating The strategy makes...

Home supply and services

Shaken, not stirred: The fate of the supply market

This Energy market perspective was taken from our Energy Spectrum publication on 4 October 2021. To find out more about a free trial to Energy Spectrum, find out more here or contact Robert on r.buckley@cornwall-insight.com. As we enter the winter 2021-22 trading season, the energy supply market remains in intense...