What will 2012 bring for business energy?

03/01/2012

As the new year starts to build up momentum, many companies will be planning to review their business gas and electricity requirements.

However, before making plans, it may be useful to learn about what to expect in 2012 in the energy market.

In terms of gas and electricity, officials are predicting a positive upturn.

Energy minister Charles Hendry has set out his hopes for a "prosperous 2012" in oil and gas, which could signal the return of competitive tariffs.

Some 46 new licences have been granted to energy providers to explore for hydrocarbons in the North Sea as part of the 26th offshore oil and gas licensing round.

Mr Hendry explained: "Oil and gas remains crucial to the UK economy – contributing around two per cent to the country’s GDP.

"Our innovative licensing system continues to make the UK one of the most attractive places to do business.

"These continued high levels of interest, and the award today of these licences, gives me yet more reason to be optimistic for a prosperous 2012 for the UK oil and gas sector."

However, there is still scepticism over a return to competitive energy prices.

According to Business Green, the price of oil will remain the same, unless there is a complete market collapse.

Oil producing countries will be reluctant to see prices drop too far, because they cannot easily increase supplies and because the power of the OPEC cartel.

In light of this, and increasing government incentives to switch to green energy, the new year may see greater emphasis put on sustainable technology.

Companies disillusioned with traditional forms of gas and electricity could turn to the Green Deal and energy efficiency measures, such as smart meters and insulation.

The Renewable Heat Incentive should also lead to a very good year for the renewable heat sector.

Under the scheme, businesses can gain returns by installing low carbon heating systems.

Posted by Tom Barnett