Is the end finally nigh for politicians getting confused by whether power prices rising or falling?
Publishers of a new list of average wholesale prices in the UK certainly think so.
Members of the public and energy users alike can check on prices in the index going back to 2011.
All the information has been put online for free in a bid to create more “transparency” say the power price experts ICIS.
It is based on “live” data that has been reported by buyers and sellers, such as the volume of electricity traded and the number of trades is available, plus the new ICIS Power Index (IPI).
This is effectively an average price of power – electricity is traded in pounds per megawatt hour (£/MWh) – which tries to take into account the cost of electricity both in the short and long term.
In the past, according to Zoe Double, Head of Power at ICIS, it has been “perfectly possible for a politician on one side of the house to be looking at short term prices and say, ‘Oh, they’re going up,’ whereas the politician on the other side of the house will be saying, ‘Actually wholesale prices looking at the long term delivery, they’re going down.”
Now they can focus on just the “policy matters”, she tells ELN: “If politicians are having a debate about the energy markets, they can go to one reference price and they can both talk about the same reference price.”
They have created this by looking at the price for two main seasonal contracts for power.
Ms Double explains: “What we’ve done is focus on the two contracts that are due to deliver next, so at the moment we’re in August so we’re looking at winter ’14 which starts from 1 October and we’re also looking at summer ’15 which will start from 1 April next year.”
She believes this will be less confusing because you’re not looking at the “seasonality” of prices: “During the summer prices short term prices are lower and during the winter prices tend to deliver higher so we’ve focused on an entire year of delivery so there is no confusion.”
The statistics reveal there was a spike in the volume of gas traded in the UK as well as near doubling of the number of trades on 3 and 4 March 2014 as tensions between Russia and Ukraine reached fever pitch, when Ukraine’s then-leader suggested Russia was declaring war. Ms Double says: “The markets reacted instantly.”