The Business Brief - Issue #1
Welcome to The Business Brief, your go-to source for a concise and informative recap of some of the latest trending articles in the business world. As a business consultancy, we understand the importance of staying up-to-date with the latest news and developments, which is why we've created this review of trending articles. Our team of experts brings you the most relevant and insightful pieces, analyzing and summarizing their key points in a quick and easy-to-read format.
Interesting from the Financial Times last Friday regarding the outlook on the cost of energy and the impact of the conflict in Ukraine.
Europe has weaned itself off Russian Gas and is unlikely to return it and likely the worst of the European gas and power crises has passed, according to Pierre Andurand, one of the world’s top-performing traders in the sector. Deep cuts to Russian gas exports in retaliation for western support for Ukraine drove the European benchmark price above €300 a megawatt hour in August, more than 10 times its normal level. But in recent months it has tumbled back to about €50/MWh — still historically high but far more manageable for European economies mired in a cost of living crisis.
“I think Putin lost the energy war,” Andurand said in an interview with the Financial Times. “Very high natural gas and power prices in Europe were extremely bad for the world economy but now they have come back to a more reasonable level. If gas prices stay here there will be much less worry about inflation and interest rates rises. There’s no more fear of an energy crisis.
This is encouraging for businesses in Ireland that this is the position in the markets but the speed at which the reduction in wholesale energy prices, as traded/bought forward etc. in the markets, will feed through to businesses will create a pricing lag for consumption here. What’s important is that government and regulators are watching to ensure price reductions are passed through to business in the optimal time frame - There was uproar in the UK yesterday when Centrica (owner of British Gas) published 2022 results where profits have tripled in 2022 to £3.3bn.
Overall, the pricing of energy in Ireland is a critically important to business and has to be closely watched by government and regulators to protect Irish business. To the extent that the nub of the problem creating the energy crises may have passed/is now stabilised policy makers need to ensure that the businesses that are hurting from the cost of energy crises (which is all businesses and not a sectoral selection based on lobby group noise) have a pathway to better manage their energy consumption/costs.
