News & Events 
Pre-Budget Report Dec 09 
 
Alistair Darling yesterday began the painful process of hauling back the UK from the brink of financial excess, as he released a raft of measures aimed at reducing the government deficit from 12.6% this year to 4.4% by 2014-15. Major measures include a rise in NI in 2011, a return of the VAT on Jan 1st, and of course the one off 50% super tax on bankers bonuses over £25,000. 
 
 
 
 
Your legal obligations under new CRC legislation for all HH meters 
 
Under the new Carbon Reduction Commitment (CRC) Energy Efficiency Scheme legislation, you or your appointed representative will be required to take action in a six-month window from April 2010. Failure of any company with a HH supply to take the appropriate action will result in a fine of up to £5,000 plus £500 per working day until action is taken. At worst a director could face imprisonment. 
 
The action required of you will depend on your business’ carbon footprint. Those businesses which, in 2008, consumed over 6,000 megawatt hours (MWh) on the half-hourly market will need to register and comply fully as participants in the CRC scheme (calculating/disclosure of carbon footprints, annual reporting, purchasing/surrender of carbon allowances). Those organisations which, in 2008, had at least one settled half-hourly electricity meter and consumed more than 3,000 MWh but less than 6,000 MWh of electricity will need to make an information disclosure under the CRC scheme. There is no requirement to report on emissions or to purchase and surrender allowances for these organisations. 
 
Calculations and reporting is likely to be a minefield, particularly in the early days of the new scheme, however any scope for leniency for companies who do not comply fully is unlikely. 
 
If you would like to discuss the impact CRC will have on your organisation, or you would like us to guide you through the process to avoid the penalties please call Richard Dormer, Technical Director on 0844 824 3838 or email CRC@BusinessSwitch.co.uk. 
 
 
For Manufacturers. 
Pound Gets Inflation Boost 
18 Nov 09 
 
Sterling climbed to a 2 month high against the euro yesterday as strong inflation figures buoyed. 
 
CPI rose to 1.5% against a consensus view of 1.4%. There is the possibility this will not last however and, like the Bank of England warned last week, CPI will probably spend more time below its target rate of 2% than above it. 
 
Sterling's move was kept in check by a comment from Bank of England director Andrew Sentance. He said yesterday that emergency stimulus (quantitative easing) measures for the U.K. economy had better remain in place for an undetermined period. "We have to be open-minded" about more quantitative easing, Sentance added, even though he thought that the recession in the U.K. had come to an end. 
 
Sterling gets another chance to jump today with the Bank of England minutes from this month's meeting. This is of course the meeting when they decided to raise rates by a less than expected £25bn. The all important factor is the split of votes and where those other votes went. If those who didn't vote for £25bln voted for no change sterling should rise. If however they voted for a £50bln expansion sterling will probably come under pressure, especially if Mervyn King was one of them after his August performance. 
Dollar strengthened as well yesterday as equity markets began to look uncomfortable at their recent highs. The greenback was also helped by Ben Bernanke commenting on ‘strong’ dollar policy. The Chairman of the Fed said that they would “continue to monitor these developments closely” and that they were “attentive” to the implications of changes in the value of the US dollar. 
 
 
Information provided by World First Ltd, our partner offering FX currency and risk management services. 
 
Automatic Contract Rollovers For "Micro-Businesses" - Ofgem Energy Supply Probe 
 
 
Ofgem recently gave the final package of remedies the 'green light' which will mean new licence obligations for 'micro-business' contracts from January 2010. Key changes include: 
 
• New automatic contract renewal rules (limiting the length of rollover contracts to 1 year) 
• Ability for customers to send a termination notice at any time during their contract 
• New requirements to provide additional information on contract terms and renewal process 
 
A 'micro-business', for the purposes of energy supply, has been defined as businesses that employ fewer than ten people and which have an annual turnover of less than 2 million Euros; or which use less than 200,000 kWh of gas per year or 55,000 kWh of electricity per year. 
 
This means that any company which falls into the 'micro-business' category should ensure they are offered the correct contract terms and the new licence obligations are correctly applied.  
 
Further details of the new ruling can be found at Ofgem's website 
 
Britain faces a blackout and politicians are to blame 
 
The world is swimming on a sea of oil, natural gas is being found in increasing abundance, there is more coal in the ground than the world can ever consume, and nuclear energy has been proved a safe and reliable, if expensive, source of power. For those who live in windy and sunny places, throw in a bit of wind and solar power, and you have more energy than can ever be needed by businesses and consumers.  
 
Yet Britain faces brown-outs and blackouts. The national grid is under strain; its nuclear power stations are old and decrepit, with only one scheduled to survive 2023; many coal plants do not meet new European Union pollution standards, and will have to be abandoned if it proves uneconomic to fit clean-up equipment. Experts estimate that electricity shortages are likely between 2013 and 2016 – but will occur sooner if the economy recovers rapidly.  
 
A "shortage" can only occur if prices are not permitted to rise sufficiently to price some users out of the market. In the case of electricity, a product considered essential to everyday living, no such price rise would be politically tolerable – or at least politicians and regulators would so conclude. So the power to allocate scarce supplies would pass from the market to – you got it – them.  
 
The fault for the impending problem lies not with the Lord for failing to provide adequate supplies of energy, nor with the energy industries for failing to make them available at reasonable cost, nor with consumers for keeping their homes warm in winters and cool in summers, and their vehicles rolling merrily along. Nor does the fault lie in our stars – some inevitable "running out of oil". It lies in ourselves, or more precisely in the politicians in whom we lodge responsibility for energy policy.  
 
These officials need reasons to be relevant. In the case of energy, that relevance comes from two threats: that unreliable foreign suppliers will capriciously cut off supplies, and that we are running out of, or for some reason should not use, fossil fuels. The first threat is met with calls for "energy independence". Why Britain or any other country should be independent of foreign energy suppliers any more than it should strive for "steel independence", or "tea independence" is never made clear. Nor do politicians confess that energy independence is an unattainable goal for any nation other than those endowed with vast supplies of oil, for many more decades the only fuel that will be able to power the vehicles that get most commuters to work and most goods to market.  
 
It is true that most major oil sources are located in nations whose rulers wish western industrialised countries ill, and who have in the past and will in the future cut off supplies, in a search for political advantage. But the solution is not pursuit of the unattainable Holy Grail of energy independence: it is pursuit of supply diversity to reduce the risk of political cut-offs to a bare minimum. Britain's electric supply industry starts off with an advantage: unlike the continent, which must rely on Vladimir Putin to keep natural gas supplies flowing, Britain depends on reliable Norway for an increasing portion of its supplies. And other sources of the natural gas that now provides almost half the fuel for its electric generating stations are increasingly within reach. Technology has made it cheaper to drill for deposits not reachable only a few years ago, and more and more possible to rely on an increasingly broad and deep market in liquefied natural gas. Prices do tend to fluctuate, but since natural gas prices are no longer coupled to oil prices, and hedging against increases is feasible, the volatility that so unnerves consumers can be minimised. Add some more storage capacity, and you have a viable energy policy.  
 
The second threat to an adequate supply of electricity is political. In the case of everything from wind machines and solar panels to generating stations, the Nimby rules. The not-in-my-backyard crowd can always persuade some local politician that a wind machine would impede m'lord's view of his domain, or a solar panel would consume too much space in some unpopulated desert, or a nuclear plant would curdle cows' milk or radiate sperm-destroying rays. The time and money it takes to get permits, and the willingness of politicians repeatedly to change the rules of the game, raise entrepreneurs' capital costs, making shortages almost a certainty.  
 
Delete "almost". To save Britain from the scourge of global warming, the Government proposes to reduce carbon emissions to levels 34 per cent below those in 1990 by 2020, and 80 per cent below by 2050. This is not the place to argue whether the data support the warming thesis. Suffice it to say that there is enough evidence to suggest that it would be prudent to take some measures to reduce CO2 emissions, if the cost can be kept at reasonable levels. The cost of a shortage of electricity is not what one would consider reasonable. So add to a sensible policy the call by Ed Miliband, energy and climate control minister, for an acceleration in clean coal research, and it just might be possible to avoid the electricity shortage that is darkening the nation's economic outlook. 
 
Sep 09  
By Irwin Stelzer, Telegraph.co.uk 
To read the full unedited article visit www.telegraph.co.uk 
 
Has your business taken advantage of The Carbon Trust interest-free loan yet? 
 
Back in June 09, The Carbon Trust announced £100million in interest-free and unsecured loans for SME's to invest in energy saving equipment and cut the costs of their energy bills. The initiative aims to help struggling businesses through the recession, whilst at the same time reducing their carbon footprint. 
 
To date, thousands of businesses have successfully applied and received these loans and have already slashed the cost of their energy bills by up to 75% and the demand is growing steadily.  
 
The minimum loan amount available is £3,000 - enough to install a new energy efficient boiler, refrigerator or lighting and at the higher end, the maximum loan available of £400,000 could enable companies such as manufacturers to install modern, less power hungry production equipment. 
 
The Carbon Trust predict that the savings that most companies realise on their bills will be more than the cost of the loan, effectively meaning they benefit from brand new equipment, increased efficiency and reduced running costs, all at no expense to themselves - whilst of course helping to drive the UK’s move to a low carbon economy. 
 
Carbon Trust Chief Executive, Tom Delay said: "Small and medium businesses are the backbone of the UK economy and key to the move to the low carbon world. We are extending a helping hand to them by offering more than £100m in interest-free, unsecured loans at a time when bank funding is hard to come by. Our zero per cent loan offer is as close to free money as a business can get, and is flexible enough to help almost any small or medium business, from the corner fish and chip shop to a factory.” 
 
The Carbon Trust also offers advice to businesses, including a free on-site service to help them identify the energy-saving equipment with the greatest potential to reduce their running costs. 
 
Businesses can find more information about interest free Carbon Trust loans by calling 0800 085 2005 or visiting www.carbontrust.co.uk/loans 
 
Aug 09 
 
Water bill cuts put customers first 
 
Water bills in the UK will drop by an average of £14, or 4 per cent, by 2014, under a five-year pricing plan by Ofwat, the regulator, that will heavily curtail water companies’ investment programmes. The regulator bowed to political pressure to put consumers first. The last price review, in 2004, was widely seen as having been too generous to the water companies. 
 
Bills have risen by 40 per cent above inflation since privatisation in 1989, and jumped 18 per cent in 2004. Regina Finn, Ofwat chief executive, said that the regulator had “challenged the companies’ plans rigorously” to come up with an equitable result. 
“We understand times are hard and we have listened to what customers have told us,” said Ms Finn. “They want a safe, reliable water supply at a reasonable cost. People can shop around for the best deal on many things, but not water ... Our decisions allow efficient, well-run companies to invest in the right place at the right time for the right price.” 
 
Only customers of Northumbrian and Essex and Suffolk, both owned by Northumbrian Water, will see price rises, of £3 and £15 respectively by 2014, equivalent to 1 and 9 per cent of current bills. Others will see prices held level or reduced over five years.  
Customers of Dwr Cymru, the non-profit Welsh utility, will see the biggest reductions, of £35, or 9 per cent, on current bills. South West Water, the Pennon Group subsidiary, whose bills are the highest in the country, will be cut £30, or 6 per cent, while Thames Water will be held steady at £304 a year. 
 
Tony Smith, chief executive of the Consumer Council for Water, a government-backed advocacy group, said the proposals looked like a “pretty good deal” for customers. “The last five years have been relatively generous for water companies,” he said. “Consumers have had above-inflation price rises for a long time and feel they’re not very clear what extra they’re getting for their money.” 
 
At the end of five years, average water bills will be 12 per cent lower than requested by Severn Trent, 11 per cent lower for South West Water, 10 per cent lower for Northumbrian Water and 11 per cent lower for United Utilities........ 
 
Aug 09 
By David Fickling, FT.com 
To read the full unedited article visit www.ft.com 
More UK gas storage needed to ensure integrity of supply 
 
Pressure is mounting for more investment in UK gas storage facilities to ensure integrity of supply. While the three week long contractual dispute between Russian and Ukraine over gas prices and transit fees at the start of the year may have been an isolated issue, it has certainly highlighted UK vulnerability to volatility in the gas market. 
 
At the heart of the problem in the UK is the fact that our main reserves and supply of natural gas from the North Sea are declining, making the country more dependent on imports. By 2015, it is likely up to 80 per cent of the UK's gas supplies will be imported, compared with about 40 per cent now. 
 
Currently Britain has just 15 days of gas storage against 99 days in France and 122 days in Germany, leaving it far more exposed to disruptions. Being the largest gas producer in the world, Russia holds a mighty power over Europe. Indeed, just turning the valves off on three pipelines could virtually switch off the European economy. France, Germany, Spain and Italy all have higher current capacity than the UK's total projected capacity. So, even if all the currently planned projects go-ahead, the UK will still not enjoy the levels of security seen among other countries. Britain currently has the capacity to store 4.3 billion cubic metres with the majority of the total stored at the Centrica operated Rough facility in the North Sea, 18miles off the East Coast. We currently have stocks of 3.4 billion cubic metres. 
 
Recession delays investment 
 
Britain's plans to increase gas storage run the risk of being left in tatters by the credit crunch. If we are to effectively bolster Britain's energy security, then government and the energy industry need to act now to increase UK gas storage capacity. This means investment measures need to be put in place urgently to ensure at the very least that all of the planned gas storage projects come to fruition. In short, we need to act now to protect the businesses, jobs and families that would be damaged by a gas shortage, and to safeguard national power supplies. 
 
Schemes are not only being held up by financing problems, but also by difficulties obtaining planning permission from local authorities fearful of their environmental impact. 
 
In these difficult market conditions, it has become ever more important from a funding perspective for developers to drive down the cost of ownership and maintenance of gas storage infrastructure. 
 
While there are a number of factors which are leading to increasing fears for Britain's vulnerability, some security is provided in uncertain conditions by investments in infrastructure to receive LNG (liquefied natural gas) shipments. In May this year, South Hook LNG terminal at Milford Haven, Wales, opened - the largest and most advanced LNG terminal in Europe. Once up and running at least two LNG ships should be arriving at the facility each week, providing a significant boost to the UK's gas supplies. While developments like this will help us to better weather uncertainties generated by such disputes as the recent Russian gas row with the Ukraine, there will always be a risk that LNG ships get re-routed to more lucrative International markets. 
 
Britain's shortage of gas storage capacity not only leaves us vulnerable to shortages in power supply, but is also driving up wholesale prices, leaving businesses and consumers facing higher bills in the future, energy analysts have warned. Boosting the total storage capacity would cut the premium on stored gas and cut Britain's reliance on imports during periods when prices are at their highest. 
 
In conclusion, Britain faces a very real risk of an energy crunch in the coming years if planned projects fail to get the green light due to funding and planning issues. 
 
Mike Major is chief executive officer of Energy Industries Council (EIC), London, UK. www.the-eic.com. 
Jul 09 
To read the full unedited article visit www.engineerlive.com 
EU plan an energy supergrid to protect Europe from Russian threats 
 
A report in The Times today outlines a huge infrastructure project to connect european states with each other and energy rich states in Africa as well as linking europes wind farms to a central hub to reduce reliance on local conditions. 
 
 
Experts warn of major blackouts and electricity shortages in the next 5 year 
 
A BBC News survey of 31 of the countries leading experts on energy issues has highlighted a worrying concern at our crumbling energy infrastructure. 
 
Dr Jon Gibbins, of Imperial College, gave an honest and open appraisal of the future of the UK electricity supply to government ministers: 
 
'You can't guarantee that the lights will stay on,' he warned. 
 
'You are just taking a tremendous risk. You don't want to take a risk with the electricity supply. People die when you lose electricity supplies.' 
 
To read the full article please follow this link to the Daily Mail 
 
 
Bizz Energy calls in the administrators. Monday....3rd November 2008  
 
The credit crisis seems to have claimed another victim in the energy market. KPMG have brokered a deal that allows Centrica to pick up the 40,000+ customers for a reported £3.5 million. Bizz energy as a business was set up eight years ago to challenge the so-called big six energy companies, with a recent valuation in the region of £40-60 million Centrica seem to have acquired a bargain. The second in dependant supplier to get into difficulties in as many weeks is a symptom of many companies across the UK finding credit lines being stretched to breaking point with refinancing options diminishing rapidly. 
 
 
If you are a Bizz customer call us on 0800 048 2928 to get ahead of the other 40,000 for an alternative contract. 
 
 
 
 
 
 
Electricity 4 Business E4B goes into administration! ............Wednesday 22nd October 2008 
 
Reports from the industry and Ofgem today informed us that the UK's leading budget electricity supplier Electricity 4 Business or E4B has ceased trading and entered into administration. 
Telephone calls to their head office go unanswered and access to their pricing website has shut down. 
 
What does this mean for their customers? 
 
Your electricity supply will NOT be effected 
All E4B customers will be allocated to a 'Supplier of Last Resort' on deemed -off contract rates 
Your supply contracts with E4B will be null and void and the allocation to another Supplier will happen on 24th October 08 
 
What do you need to do? 
 
Cancel your direct debit to avoid losing your money 
Call 0800 048 2928 and talk to one of our account managers to get a new contract to avoid penal rates from the 'Supplier of Last Resort' 
or/ 
 
Why has this happened? 
 
It is unclear at this point why this has happened , speculation points to the volatility of the energy market and the credit crisis as the main causes of the failure. 
 
Implications? 
 
If a large energy company can be forced out of business, particularly when they are being criticised for high prices, it should be a warning to other companies in more exposed industries to protect their future. If you are concerned about the credit crunch and its effect on your business click here. 
 
 
Blackberry Bold 9000 
 
The new Blackberry Bold 9000 has been voted the 'Best Buy' blackberry device by The Mail Business section who reviewed the top 12 handsets on the market to judge them on ease of use and speed of service. The Bold 9000 has "fast Internet access, satnav and a gorgeously bright screen; has easy to set up push e-mail and a superb keyboard, making it the best pocket emailer bar none." 
The handset does look impressive and telecoms specialists with BusinessSwitch are keen to investigate it fully, however the new technology is always attractive until you are the one finding the faults, and with a price tag of £590 it will have to perform well. 
Gas Give-Away 
 
Over the weekend of 11th October the gas spot market crashed through the floor. The good flows of gas from Norway coupled with the warm October weather and the lack of, already full, storage capacity in the UK meant that companies had no option but to give away gas. 99% of customers will not benefit from this, however those on tracker or flexible products where a percentage of their usage is bought on the open market will potentially be looking forward to a nice rebate from their supplier. 
Business Electricity Prices Soar as Gas Prices Soften 7-Oct-08 
 
Power prices continued their rise through Tuesday as worries over supply margins in November pushed the market up. Gas prices on the other hand fell as increased supply for winter periods was predicted. 
 
Electricity Baseload prices for November traded at £144 MWh, up from £135 on Monday.  
 
There are serious concerns over the position of supply in mid November, this is pushing prices higher still. 
 
On Tuesday the National Grid showed 24 of 89 generators were offline against 23 a day earlier. They included the 645 MW DRAX coal-fired plant and 485 MW Aberthaw B-8, both shut down overnight. 
 
The gas market however fell as supply more than outstripped exports commitments to Europe even with the colder weather. 
 
The Norwegians have production targets to reach and UK storage facilities are full. Even though the weather has turned chilly supplies are high. 
 
Gas for delivery in November was down 1.75 pence at 79.00 pence, and 2009 first quarter down 1 pence at 91.25 pence and Summer 2009 down 0.90 pence at 71.85 pence. 
 
More good news was to follow as Norway said its total oil and gas output would grow by 3.8 percent next year from 2008 and rise further by 2012 with the emphasis on gas. 
Telecoms Wholesale Prices Continue to Drop 6-Oct-08 
 
The UK telecoms market has undergone a revolution in the last decade, the price of technology and the competitive market place have driven down the wholesale cost of a 'minute'. The situation is ripe for UK business consumers to take advantage of this trend, at present the telecoms companies are the ones that are receiving the advantage as their margins increase, this has in turn led to investment that has resulted in the sophisticated offering available today. 
 
However it is our belief that in these times these benefits need to be passed on to the business consumer as a reduction in consumer costs rather than an increase in consumer products. 
 
In a decreasing market a strategic review on costs is the best way to increase profits 
 
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