A sustainable approach to procurement Martin Garry Energy Services Manager.

• Slide 1

A sustainable approach to procurement Martin Garry Energy Services Manager Slide 2 Energy Risk Management Strategy Current Policy Principles and Analysis As a general principle, the energy market should not be read or anticipated. This policy works on the principle of managing risk through a combination of forward hedges, short procurement, caps (triggers) and multiple buys. This strategy is supported by the following: A number of un-anticipated events can cause temporary one-off price spikes so reading or anticipating the market is unreliable. Embedded premiums for buying long. Volatility in the short trading market. De-coupling of relationship between Oil, Gas and Electricity. Slide 3 Energy Risk Management Strategy Slide 4 Month Ahead vs Day Ahead Slide 5 Energy Risk Management Strategy Slide 6 Reading the market An impossible challenge Slide 7 Market and curve Slide 8 Risk Management Guidance Understand your requirements Risk Management Policy Budget exposure Consider options Energy Efficiency Campaigns Reforecast / Reshape Ability to manage price change Slide 9 Changes in Levy Exemption Certificates Removal of LECs in the Summer budget Raising c.3.9billion during the life of this parliament Introduction of the Transition Period 1 st August to the end of Summer Extension of the Transition Period 1 st August to 31 st March 2016 REGOs No real market Retirement of REGOs PPAs Removal of LECs Private wire / onsite Renewable Heat Incentive Slide 10 Other Legislation to keep an eye on P272 / P322 The original proposal P272 Proposal would mandate that electricity consumers in Profile Classes 05-08 are settled using half-hourly (HH) consumption data from 1 April 2014. REMIT REMIT is an EU regulation on energy market integrity and transparency, it provides a consistent EU-wide regulatory framework specific to wholesale energy markets. ESOS Under ESOS, all large companies must undertake an energy audit conducted or overseen by an approved ESOS Lead Assessor once every four years. DCP 114 Where the customer exceed its Maximum Import Capacity (MIC) or Maximum Export Capacity (MEC), and provides rights for the distributor to take appropriate action against persistent breaches. DCP 115 Where the customer does not use some or all of the Maximum Import Capacity (MIC) or Maximum Export Capacity (MEC) reserved for its connection. DCP 161 and DCP 242 DCP 161 was proposed, rejected, and then overruled by Ofgem. It proposes that excess capacity should have a higher rate than normal capacity. DCP 242 has now been produced; in a nutshell it is proposing that DCP161 is delayed until 2018. Slide 11 Thank you. If you have any additional questions, below are my contact details: Martin Garry 07843 514243 [email protected]