It’s been just over a year since I joined TEC, I wanted to briefly share with you a few reflections on my first year.
I challenge anybody to recall a year in the Energy markets as frantic and volatile as the one we’ve just experienced! Following Russia’s invasion into the Ukraine we saw a desperate push over the summer to restock low gas storage levels. With this, we saw forward prices trade up to 15 times higher than their historical average.
Due to the gas and power hedging strategies agreed with the TEC membership we were insulated from the worst of the high prices. The fact that TEC members did not have to rely on government support is something that we can all jointly feel proud of.
As it turned out, we were fortunate across both Europe and Asia to experience very mild winters meaning that both high consuming economic regions used significantly less gas than forecast. The same can be said for our members. Aside from weather related lower consumption, we witnessed demand reduction programs being deployed across several of our members estates this winter.
I must stress that despite the relatively lower prices we are seeing in the forward markets today, we must not become complacent. Firstly, prices remain high and we should continue to look to reduce usage to reduce spend. Secondly, much of Europe remains relatively unchanged from an infrastructure perspective. Despite the opening of new LNG terminals across Europe, much of the new infrastructure that will deliver an enduring reduction in reliance on Russian fuels will not deliver until 2025 at the earliest. This means that whilst the summer may trade lower as storage levels look relatively healthy, much of Europe is vulnerable to a colder than seasonal normal winter.
Engagement across our membership to gain a better understanding of market conditions and more importantly, to collaborate and share ideas on what can be done has been particularly pleasing to be involved in. I personally have enjoyed, and I believe our membership has benefited from, closer ties with Professional HE Services (PHES) wherein we’ve worked more closely with AUDE and BUFDG to keep our combined membership informed and connected. Being new, my experience has been that collaboration and willingness to share and support each other during these more testing times are defining features of this sector.
Across our power, gas, water, and carbon frameworks we’ve welcomed 16 new members to TEC. Like our long-standing and established members, those new to TEC join to benefit from our core energy risk management services. They also join to work with the wider TEC membership as we transition to a net zero world. TEC remains focused on identifying solutions that reduce Scope’s 1 and 2 emissions. A good example of this is the work TEC has been undertaking with renewable developers to identify opportunities for a Corporate PPA (CPPA). We are currently engaging members to share market feedback and to gather interest in this next round of CPPA contracting.
Data continues to play a crucial role in energy risk management, bill validation and the identification of future solutions. It’s been fascinating working with members in identifying current data needs, largely centered around enhanced billing and bureau services whilst also considering how today’s data helps to shape future product and service provision for the membership.
I am hoping that the monthly member roundups provide a useful resource in helping you to stay abreast of market, framework, and service developments. These roundups are still in their infancy, and I would love to hear what you would like to see in future editions.
You will have seen in the April edition that we’ve announced our 2023 annual conference. This will take place at Conference Aston on Thursday 9th November. I hope to see many of you before the conference, but for those I don’t, I look forward to seeing you in Aston on the 9th of November.
As a team, we have gained a lot of valuable experience operating across the energy markets during these unprecedented times. I am immensely proud of our collective achievements and I look forward to the continued delivery of energy risk management services whilst supporting our members’ transition to a low-carbon future.