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UK retail energy price cap increased to £3,549

  • Market: Electricity, Natural gas
  • 26/08/22

Energy regulator Ofgem has set the UK's energy retail price cap at £3,549/yr for a "typical" dual-fuel household — an increase of 80pc from the previous cap.

The wholesale element of the price cap increased to £2,491 from £1,077 from the previous cap period, with this value based on the hedging strategy of a "nominal supplier" as set out by Ofgem.

The observation period for the next cap started on 1 February and ended on 18 August, with the wholesale component of the cap set at 298 p/th for gas and £282/MWh for power. At the start of this period, winter 2022-23 NBP gas prices were at 182.50 p/th and power at £176.50/MWh, while these rose to 594.50 p/th and £635/MWh, respectively, by the end of the period. Summer 2023 prices have risen by almost 400pc for gas and 300pc for power over the same period.

The new cap will equate to around £520/MWh for power and 440 p/th for gas. These are well below current wholesale prices for the fourth quarter, meaning that any suppliers would be unable to recover their costs even without the additional costs that are factored into the price cap.

All households are set to receive a £400 reduction in their energy bills this winter, provided in £66/month instalments, while the most vulnerable households will receive at least an additional £1,200, the government has said.

But wholesale prices have risen significantly since the government set out its support levels, pushing the cap well above where it would have been expected at the time.

The switch from seasonal to quarterly price caps also looks like it will only see the cap increase for the first quarter of next year if prices remain anywhere near current levels, as the wholesale component of the next cap will include a greater weighting of prices from the coming months.

The first-quarter cap will still include some weighting from February-June this year, before Ofgem set out its position to move to quarterly caps. The second-quarter 2023 observation period will run over 17 November 2022-17 February 2023, so if prices further down the curve remain elevated at current levels retail prices would rise again later next year.

Gas and power prices have continued to rise sharply over the last week, with the front-quarter NBP gas contract up by 135 p/th and the equivalent power contract increasing by £132/MWh since last Friday. This has been largely driven by the announcement of upcoming maintenance on the Nord Stream 1 gas pipeline and by the extension of 5.2GW of nuclear outages in France for the winter.

By Josh Evans

UK winter 2022-23 gas and power forward prices
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30/04/26

German chemical industry power demand could resume fall

German chemical industry power demand could resume fall

London, 30 April (Argus) — Power consumption in the German chemical manufacturing sector has fallen sharply over the past decade and could continue to decline in the coming years unless structural reforms are implemented quickly, chemical industry association VCI executive director for sustainability, energy and climate policy Matthias Belitz told Argus . Power consumption in the manufacturing of chemical products totalled 42.79TWh in 2024, according to the latest data from statistical office Destatis, making up more than 9pc of total electricity consumption. But consumption in the sector has dropped by nearly 20pc on 2014-18 levels, and in 2024 was the second lowest for any year since at least 2008, only behind 2023 ( see consumption chart ). A fall in overall chemical production has been a key driver in the power consumption decline, Belitz said. Chemical production fell by 3.3pc on the year in 2025 and was down by about 21pc on 2021, VCI figures show ( see production chart ). Chemical plants totalling 9pc of European production capacity have closed since 2022, with 25pc in Germany, a report commissioned by European chemical industry body Cefic earlier this year showed. Belitz attributed the recent woes in the German chemical industry to global overcapacity, overly complex bureaucracy and high energy costs. Global chemical production capacity has risen sharply in recent years, with particularly strong growth in China and the Middle East, while demand for basic chemicals has largely stagnated. This shift in supply-demand balance has weakened the German industry, and the Middle East conflict will "undoubtedly" have "negative consequences", Belitz said. The business climate in the German chemical industry "deteriorated significantly" in March, according to the latest survey conducted by German economic research institute Ifo. Share of power consumption stagnant Power's share of total energy consumption in the chemical industry fell narrowly on the year in 2024 to 25.1pc and was slightly below the 2008-23 average, the latest Destatis data show. An electrification investment incentive is currently "lacking", Belitz said. Electricity is too expensive, making large-scale electrification unviable without significant policy changes. And in a highly uncertain environment, it is difficult for firms to make long-term investment decisions, he added. Energy-intensive industry association VIK's index for average industrial power prices — tracking wholesale developments — stood at 309 points in March, against a January 2002 baseline of 100 points, with the rise well outpacing inflation. By contrast, the index was consistently below 200 in 2009-20. Belitz also pointed to the lack of physical availability of grid connections. Obtaining grid connections can take 5-10 years, further complicating the electrifying process. ‘Structural reforms' required to boost power demand To prevent further plant closures and enable electrification, "structural reforms" are urgently needed, Belitz said, including lowering overall power system costs, synchronising renewables expansion with grid expansion and ensuring consistently lower all-in electricity costs. "We need the physical pre-requisites regarding the grid and we need solutions for times when renewables are not producing," Belitz said, arguing that "expanding renewables capacity alone is not enough" but that "it is important that the availability of renewable energy is perpetuated". German chemical company BASF echoed this sentiment. "Politically induced costs must be reduced," a BASF spokesperson told Argus , urging a "faster, co-ordinated expansion of renewable electricity and grids", while also demanding a "fundamental ETS [emissions trading system] reform". The EU ETS puts Europe at an "enormous" disadvantage, Belitz said. Other regions have followed Europe's emissions pricing at "a significantly slower pace than expected and also with a much lower magnitude". Chinese firms, for example, pay roughly one tenth of Europe's CO2 emissions costs, and not all sites are liable, Belitz said. BASF last month opened its Zhanjiang Verbund chemical production site in China, into which it invested €8.7bn. The site's construction aligns with BASF's strategy of "investing where we see opportunities for growth", a spokesperson told Argus . China recorded 45.7pc of global turnover in the chemical industry in 2024, according to VCI data. China's 2024 chemical production was up by 26.6pc on 2021, while German production was down by nearly 19pc ( see international production chart ). And the carbon border adjustment mechanism (CBAM), intended to safeguard European industry and prevent carbon leakage, is "unsuitable for protecting our companies in international competition", Belitz said. The complexity in the industry is too high, meaning CBAM will "constantly lag behind the reality" and generate massive bureaucracy. CBAM currently does not apply to the vast majority of chemicals, although they are likely to be included in the future. Government subsidies only a ‘temporary fix' Government measures to subsidise industry, including the industry power price and an expansion of the power price compensation, are "merely a temporary fix", Belitz said. The industry power price will relieve beneficiaries of 50pc of the yearly average wholesale price in 2026-28, although only down to €50/MWh, while the power price compensation expansion aims to slightly boost aid for firms' incurred indirect emissions costs as part of their electricity costs. These measures provide some short-term relief, but more structural solutions are required to keep industry afloat. "The government cannot subsidise permanently, it will not work," Belitz said. These instruments alone are "insufficient to sustainably restore competitiveness", BASF said. Power consumption is expected to rise significantly in the long term, despite stagnation in recent years, Belitz said, citing the Chemistry4Climate study last updated in 2024. Power consumption across chemicals and pharmaceuticals, with the former making up the vast majority, could reach 160-440TWh by 2045, according to the study, assuming climate neutrality and strongly depending on how much hydrogen will be imported, although Belitz said we "must acknowledge that we will not end up in an all-electric world". In the near term, power consumption in the chemical industrial sector is likely to continue dropping, owing to further falls in production, unless structural reforms in the energy and regulatory sectors take effect promptly. By John Horstmann German chemical industry consumption by year German chemical industry, production, electricity, gas consumption index 2014=100 International chemical production index 2014=100 German chemical industry 2008-24 average energy consumption % Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

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Q&A: Crisis adds impetus to diversify from oil and gas

30/04/26
News
30/04/26

Q&A: Crisis adds impetus to diversify from oil and gas

Sydney, 30 April (Argus) — The ongoing energy crisis has impacted Singapore and other Asia-Pacific countries but has been proving that regional co-operation is strong, according to Singapore's energy regulator Energy Market Authority's (EMA) chief executive Puah Kok Keong. The crisis is also showing nations need to focus on supply diversification, alternative energy and electrification, Puah told Argus during a recent event in Australia ahead of the upcoming Singapore International Energy Week (SIEW). Edited highlights follow: What have been some of the main impacts of the energy crisis in Singapore? Natural gas accounts for 95c of our power generation, and all our natural gas is imported. About half of it is imported through pipelines from Malaysia and Indonesia, and the other half is imported through LNG that we bring from around the world. So just on natural gas, certainly there has been an impact on Singapore. The gas contracts are all pegged mostly to oil prices. Therefore, the sharp increase in Brent prices also mean that the natural gas supply to Singapore will be more expensive. The other thing that's happening is physical disruptions of gas supply to Singapore , because about 8-10pc of our gas comes from Qatar, and since the start of the conflict in the end of February, there was one LNG cargo in April and another one that was supposed to come in May that have been disrupted. Gas users in Singapore had to change course, and even the industrial gas consumers will have to look for alternative supplies. They have existing contracts from other suppliers where they can have some flexibility to bring in more gas, but if that's insufficient, they would have to procure more natural gas from alternative sources. What solutions have worked so far? In the case of natural gas, one of the timely moves that we've made is that last year, we incorporated a new government-owned company, Singapore GasCo . It was given the power to be the aggregator of natural gas demand from the Singapore-based power generation companies. The reasons why we formed Gasco was to make sure that nationally, we have diversity of supply, and that we procure enough supply of natural gas to meet all of Singapore's needs. So when the crisis unfolded, GasCo had already been operational, and they were able to, on behalf of the generation companies, aggregate the demand and go up to the market and engage various LNG suppliers on potential supply contracts. That has been proven to be useful: we have been able to get many offers from gas suppliers, and it has not been a problem to be able to get more gas. And as I'm in Australia right now, I have to say it's great that Australia has been a very reliable supplier of gas to Singapore. In fact, some of that replacement gas is likely to come from Australia. Is that alternative supply from Australia coming through GasCo? GasCo will reach out to all potential gas suppliers and will compare various factors like cost, supply reliability and timing. They look at all potential sources, even from North America and Africa. Having considered all these factors, they picked up a few suppliers that happen to come from Australia. How can Singapore and other Asia-Pacific countries ensure energy security despite their import dependence? In Singapore's case, ensuring energy security is particularly important but also especially difficult. We are a small city state. We don't have local supply — all our oil and gas are imported from different parts of the world — and therefore our dependency of energy imports is much greater than many countries. The key lesson for us is that you must make sure that you have diversified sources of natural gas that will help to cushion the impact of loss of any one source. You need to be able to find replacement supplies quite quickly. Is this crisis going to affect regional energy co-operation, including cross-border electricity arrangements or even gas pipeline supply? The crisis has led to a huge spike in oil and gas prices. We are fortunate that countries around our region are still committed to meet their contractual obligation, and at this point, we do not see any risk of disruptions to our natural gas pipeline supply. Quite clearly, countries know that we are in interconnected energy system. Singapore remains one of the major oil refining and oil trading hubs in this part of the world — not just for southeast Asia, but for Asia. At this point, where supply is a little bit more limited compared to before the crisis, many countries are looking towards Singapore to continue to meet their commitment to supply to their markets. And this includes Australia as well. Singapore is the largest exporter of refined oil products to Australia, and we have remained committed to ensure that this supply continues to be met. In terms of impacts on electricity imports and exports, I think the crisis has actually helped countries to see that everybody should contribute to diversify away from our reliance on oil and gas. Linking the various grids in southeast Asia together is important because they will allow investments into renewable energy to flow. Southeast Asia is a big region. There's plenty of renewable energy resources — solar, hydropower and wind power. The limitation is that where the resources are located and where the demand is can be quite far apart, and therefore investments needed to be put in place to make it happen — both for power generation and transmission — are quite high. And any cross-jurisdiction energy projects will also involve rather complicated regulatory approvals needed from both the exporting country and the importing country. It can be overcome, but it's not easy. Talking about electricity, are there any updates from Singapore's side on Australian firm SunCable's project to export solar power to Singapore by 2035 ? For our electricity import projects, we have three important milestones. The first is the conditional approval, which proves that a project, based on the plans, is technically and potentially commercially feasible. Then we have the conditional licence, where they will need to show that they've made a significant progress in obtaining regulatory approvals from governments, and that they have a clearer sense of the technical requirements and cost estimates after doing more technical studies. The third phase is after they have put together all their plans, lined up all their financing and potential offtakers. This is when the import license can be given. SunCable's project is still at the first stage of this three-step process. It received conditional approval from the Energy Market Authority just under two years ago, in October 2024. Do you think this crisis might help accelerate that project? The project is certainly ambitious and challenging because of the great distance from Australia's Northern Territory to Singapore. The cable will have to pass through Indonesian territories as well to reach Singapore, and therefore the long distance will definitely meet technical challenges that they have to consider, as well as regulatory approvals from the relevant authorities. Those are the challenges, but at the same time, the project does have certain advantages compared to some of the nearer distance projects. Many of the electricity import projects from Indonesia or even Malaysia are mainly solar energy plants combined with batteries, but they more or less belong to the same climate zone as Singapore. So when we have the monsoon in Singapore, when it rains for maybe one week nonstop, it may also be raining one week nonstop in West Malaysia or in the Riau province of Indonesia. That means solar output is going to be quite low. But Australia is in a quite different climate. So when it's raining in Singapore it may still be sunshine all the way in the Northern Territory. And there is a good kind of diversification of our energy sources. Finally, could this crisis affect the energy transition to renewables because energy affordability might be prioritised over sustainability? I don't think so. In fact, I think the crisis has given much impetus to accelerate the energy transition. One is, of course, the huge increase in the cost of oil and gas. For example, in southeast Asia, many economies are still quite reliant on liquefied petroleum gas (LPG) for cooking needs, and the conflict has resulted in a huge increase in the LPG price. Obviously, this has an impact on the livelihoods of the people living in southeast Asia. From just that one example, being able to shift away from a reliance on LPG to other methods of home cooking, such as electrification, is quite clearly one of the strategies that will make the region more resilient to external energy supply shocks. So I do think it has given an impetus to look at what we can do to diversify away from oil and gas and explore alternative energy, electrification and diversification as a strategy to enhance our resilience. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

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Hungary on track for EU, national gas storage targets

29/04/26
News
29/04/26

Hungary on track for EU, national gas storage targets

London, 29 April (Argus) — Hungary is on track to exceed the EU gas storage obligation and to meet its national filling requirements this year, even if injections only match last year's pace. Hungary has a derogation from the EU's storage rules that reduces its filling target to 35pc of five-year average demand instead of 90pc of working gas capacity, which trims its mandatory storage obligation to around 35TWh, or roughly 51pc of capacity, for some point between 1 October and 1 December. This means that Hungarian inventories will need to rise by under 11.5TWh to meet the EU filling obligations. Hungarian stocks of 23.7TWh as of Tuesday morning were at 35pc of capacity, below 26.1TWh on the same day a year earlier ( see Hungarian stocks graph ). Assuming that the average injection rate equals last year's 136 GWh/d over the remaining 160 days of the injection season, Hungarian stocks would reach 45.5TWh by 1 October. This would be 4.3TWh lower than a year earlier, but 10.5TWh above the EU's minimum requirement for this year. National storage obligations may accelerate stockbuilding earlier in the injection season by setting earlier mandatory deadlines. Hungarian law obliges different market participants to build storage reserves in domestic facilities. Hungarian gas system operator FGSZ must ensure that 2.1TWh of gas is injected into domestic storage by 1 July. Universal service provider state-owned utility MVM, which supplies households, must hold 19.8TWh in Hungarian storages by 1 October. And trading firms active on the domestic market must hold storage volumes equal to 2pc of their contracted supply for the 2026–27 gas year. Trading firms must notify Hungarian energy regulator Mekh of how they will comply with this storage obligation by 1 May. Failure to comply may result in a procedural fine or criminal liability, making national regulations stricter than EU legislation. Hungarian exports to Ukraine totalled 15.4TWh in May-September 2025, but flows towards Ukraine have been low in recent months. If this volume remains in the domestic market and is directed entirely to storage, end-of-season stocks could exceed 60TWh by 1 October, representing about 90pc of technical capacity and aligning with the EU's baseline storage target. This suggests that demand from neighbouring markets could have a significant impact on Hungarian stockbuilding this summer. Inverse storage demand returns An inverted forward curve and changing market conditions have made gas loan services attractive, a market participant told Argus. State-owned storage operator HGS offered inverse storage services — under which market participants can use operator-owned gas for a fee, with volumes to be returned later during the agreed period — for October 2026–September 2027 in March, the operator told Argus . The full 1.2TWh on offer was booked, representing the maximum volume permitted under the operator's licence, HGS said. This was the first inverse auction since summer 2025, because backwardation in the forward curve — with prompt prices at a premium to futures — is a precondition for the product to be economically attractive, HGS said. Only operators with regulatory approval may provide the inverse storage service, using their own working gas volumes reclassified from cushion gas. A positive summer-winter spread encouraged the use of these services this spring. "We used this option in Hungary and Slovakia," a market participant told Argus. Slovak gas storage operator Nafta offered 2TWh of inverse storage capacity for various delivery periods between 2026 and 2029 in March and April. No information on the auction results or fees is publicly available, according to a market participant. By Victoria Dovgal Hungarian gas stocks TWh Hexum vs HGS stocks TWh Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

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France's fossil fuel roadmap a key step: think tanks

29/04/26
News
29/04/26

France's fossil fuel roadmap a key step: think tanks

Edinburgh, 29 April (Argus) — France's roadmap to transition away from fossil fuels, which combines energy policies and climate targets in one document, is an important step, even though no new goals were announced, energy and climate think tanks said today. France released the roadmap yesterday, during the first conference on Transitioning Away from Fossil Fuels, ongoing in Santa Marta, Colombia. The plan matches France's climate goals with its energy policies in one document, including its national low carbon strategy and its new electrification plan set out in April . It reiterates the country's goal to move from a share of around 60pc fossil fuels in final energy consumption in 2023 to 40pc in 2030 and 30pc in 2035, to reach net zero emissions in 2050. The government plans to phase out coal by 2030, oil by 2045 and natural gas by 2050, under its national low carbon strategy and its roadmap. "France is one of the few countries in the world to have such a precise schedule for a gradual exit from fossil fuels," the French environment ministry said. The French roadmap aims to inspire partner countries on long-term planning, it said. France's last two remaining coal-fired power plants are scheduled to close or be converted by next year. The roadmap also states that over 95pc of fossil fuels burned in the country are imported. France eyes a 50pc reduction in gross greenhouse gas (GHG) emissions by 2030 compared with 1990, to reach net zero emissions by 2050. Although the country did not announce new goals, the roadmap sends an important signal, think-tank International Institute for Sustainable Development (IISD) energy policy advisor Natalie Jones said. "Higher ambition and not solely repackaging existing policies would have been even better, but an explicit fossil fuel phase strategy, with timelines, is new and welcome," she said. She added that the framing of the roadmap in relation to UN Cop climate summits, the global stocktake and climate action is significant. The first global stocktake, agreed on in 2023 at Cop 28, called for a transition away from fossil fuels in energy systems. "Few countries tackle all fossil fuels together — this gives other countries a critical opportunity to follow suit, while fossil fuel-producing nations can also lay out plans to diversify their economies as global demand for fossil fuels wanes in the decades ahead," said global research organisation WRI director of international climate action David Waskow. Asked about whether other EU countries could release fossil fuel transition roadmaps in the future, EU climate commissioner Wopke Hoekstra yesterday said that whether roadmaps are "specifically about phasing out fossil fuels… is secondary to impact". He reiterated the EU's goals — net zero emissions by 2050 and a 55pc reduction for 2030, from 1990 levels — pointing out that the wording is about reducing emissions rather than specifically phasing out fossil fuels. The "reality is… the same, you cannot be at 90pc [of emission cuts] in 2040 if you will not radically phase out fossil fuels", Hoekstra said. The EU updated its climate law earlier this year to add a 90pc GHG reduction by 2040, from 1990 levels, although up to 5pc of the target can be met using international carbon credits. Fossil fuel producer Colombia also presented a draft fossil fuel transition roadmap this week, developed with researchers, and designed to act as a potential standard for other countries to use. It aims to achieve a 90pc reduction in primary fossil fuel demand over 2026-50, and a 90pc cut in "whole energy system emissions" from 2015-50, while expanding access to energy. The plan pointed to the country's dependence on fossil fuels for revenues. Colombia exports oil and coal worth $25bn, against around $1bn in fossil fuel imports — mainly oil products, according to the roadmap. By Caroline Varin and Lucas Parolin Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

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Singapore's EMA to study geothermal energy systems

29/04/26
News
29/04/26

Singapore's EMA to study geothermal energy systems

Singapore, 29 April (Argus) — Singaporean government agency the Energy Market Authority (EMA) will carry out a study to gauge whether geothermal energy systems can be deployed in the city-state, it said on 28 April. The agency will accept proposals from consultants for the feasibility study and expects the consultant to be appointed within 2026. Proposals should be submitted by 16:00 Singapore time (08:00 GMT) on 29 June. It is unlikely that the city-state has conventional geothermal energy sources, which are commonly found in geologically active regions, EMA said. But the country aims to study the feasibility of advanced geothermal technology that can tap on sub-surface heat for power, heating and cooling needs, EMA added. The move builds on EMA's 2024 study, which identified areas in Singapore where geothermal energy might be available. The country is looking to geothermal, nuclear and solar to improve energy resilience and widen its energy mix , which will comprise domestic sources and imports, the country's minister-in-charge of energy, Tan See Leng, said at Singapore International Energy Week in October 2025. Solar energy is Singapore's most viable option but will be able to meet only up to 10pc of the country's total projected electricity demand by 2050 given its land constraints, Tan said. Natural gas accounts for 95pc of Singapore's energy mix . Piped natural gas from neighbouring Malaysia and Indonesia made up 43pc of the country's gas imports in 2025, with the remainder supplied as LNG from different parts of the world, EMA previously told Argus . The city-state received a total of 6.04mn t of LNG in 2025 , data from Global Trade Tracker (GTT) show, with nearly half of the volumes sourced from Qatar. But exporting supplies from the Middle Eastern country has become more challenging because of the de facto closure of the strait of Hormuz. Singapore is also turning to other energy sources to decarbonise its power sector, having pledged to achieve net zero emissions by 2050. By Hykel Quek Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

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