Utility Exchange reported earlier this year that a dangerous gas leak at the Elgin platform in the North Sea has resulted in its shut down and an exclusion zone in the area.

As a result of the shut down, gas prices increased by 5% for day ahead delivery. Heavy mud was pumped into the well as part of the work to stop the leak. Total said yesterday that it had succeeded in plugging the leak.

However, the company is unable to say when gas production could begin again. Before the incident the Elgin platform pumped around 3% of Britain’s total gas output. But this North Sea incident hasn’t been the only one for Total. There have also been safety issues in Yemen and a gas leak in Nigeria, all of which have dented the company’s hopes of increasing global output by 2.5% up until 2015.

The well will be monitored over the next few days to ensure the operation has been successful. If the heavy mud has done the trick then there will be no need to drill relief wells although drilling of one of those relief wells began in April.

The chief executive of Total said the leak would cost the company around $300m in lost production if production doesn’t resume before the end of the year.

SSE has seen a growth in its power generation business which has helped to offset its retail operation. The company said the year had been one of turmoil in the global energy markets with economic uncertainty.

The company’s operating costs for its retail division which supplies gas and electricity to both the domestic market and businesses fell 20% to £321.6m. At the same time its operating profit at its wholesale business unit was up 6.4% to £607.9m.

Chairman of SSE, Lord Smith of Kelvin, said “Higher wholesale gas prices, falling demand for energy and a succession of winter storms presented major challenges for the wholesale, retail and networks parts of SSE”.

He added that the profit made by SSE allowed the company to “employ people, pay tax, make investments that keep the lights on and provide an income return that shareholders like pension funds need”.

Higher wholesale gas prices have been blamed by a number of energy providers for increases in both business electricity prices and gas prices.

Meanwhile Phoenix Energy has agreed to sell its gas supply business to Airtricity, SSE’s retail supply brand. Phoenix Supply is the leading gas supplier in Northern Ireland with around 130,000 domestic and business customers in Greater Belfast. The acquisition will mean Airtricity will become the second largest energy supplier and dual fuel provider in Northern Ireland.

The CEO of Airtricity and Director of Business Supply, Contracting and International at SSE, Kevin Greenhorn, said “We’re delighted to be entering into this agreement and see it as an exciting new chapter in SSE’s long-term sustained growth in Northern Ireland. This is a significant step forward for both Airtricity and Phoenix Supply as we seek to become the largest supplier of both electricity and natural gas in Northern Ireland. This is especially exciting as for the first time consumers in Northern Ireland, including Airtricity and Phoenix Supply customers, will be able to enjoy the benefits of dual fuel products and services”.

The acquisition has to be approved by the Irish Competition Authority and the purchase is expected to be completed in the summer.

Research from the Forum of Private Business has found that small businesses are more concerned about business energy costs and telecommunications including broadband, than other infrastructure problems.

The findings come as the trend for business electricity prices and business gas tariffs is upwards.

A survey on Infrastructure for Growth, conducted by the Forum, was completed by members and 80% of those responding said that energy costs are “very important” or “important”. A similar number said telecommunications and broadband access were also issues, especially for those small businesses in rural areas.

75% of those responding to the survey said reliability of energy supply is also an issue with other key issues being mobile communications and e-communications.

The Forum’s Head of Campaigns, Jane Bennett, said “Improving the UK’s transport network is extremely important but infrastructure is about more than just roads and railways – it is about creating a business environment and road map for growth that paves the way for small firms to be successful and create jobs. We want the Government to build on what it is doing to create a joined-up system where projects on transport and communication work in harmony with proactive policies on energy, tax and red tape to boost business and consumer confidence and put the economy back on track”.

With energy costs at the top of the list of infrastructure issues for small businesses it’s still important to compare business electricity prices and gas rates when your contract is due for renewal. Don’t get rolled over into an expensive deal and pay high out of contract rates.

E.ON has announced today that it will not increase residential energy prices for existing customers during 2012 only weeks after revealing that it’s profit for supplying gas and electricity to UK homes last year was less than 2%.

The announcement comes after Centrica, owner of British Gas, warned that gas prices were set to increase again, as reported by Utility Exchange last week. Centrica said the trend for retail energy was for it to go up and it’s thought prices could increase by the end of the summer.

The chief executive of E.ON, Dr Tony Cocker, said “Let me be clear, E.ON will not raise residential prices in 2012. I want every family in the UK to know that we will always do our best to be fair and act in the best interests of our customers. Earlier this year we cut our prices in a way that helped some 75% of our customers and I hope that the certainty we’ve given today will show our customers again that we are committed to helping them, and I also hope that it will help to show millions more that if they look to switch they can find in E.ON a company that puts its customers first”.

He added, “Unfortunately global energy markets are expected to see an overall trend of rising wholesale prices but as a company we believe in acting fairly, which means cutting prices when we can and never raising prices unless absolutely necessary. We will continue to spare no effort in getting our customers energy fit by insulating homes, installing smart meters and providing advice that makes a real difference. That help and action, combined with the price cut announced in February and the promise we’ve made today, mean that E.ON customers can plan for the future and properly control their energy costs, as well as reducing their consumption”.

E.ON launched its Reset Review in January. The company is reviewing all aspects of its relationship with customers including tariffs and bills, payment methods and how products are sold.

Centrica has warned that wholesale gas prices for this winter are around 15% higher than last year. Last summer British Gas increased gas prices by 18% and electricity prices by 16% pushing up the average dual fuel bill to around £1,288 a year.

The energy supplier said it wasn’t just wholesale gas prices which had increased. Other costs have also gone up including transportation and environment subsidies imposed by the government.

Initially Centrica thought prices would increase by around £50 a year but this didn’t include the higher wholesale gas prices so that figure will undoubtedly go up. Higher wholesale gas prices are also likely to affect business gas prices meaning it’s as important as ever to compare business energy prices when your energy contract is due for renewal.

Centrica said “The trend for retail energy costs therefore remains upwards”.

Experts have warned that the 2011 Japanese earthquake is still affecting wholesale gas prices with a possible 28% increase in wholesale prices. Japan has just shut down its last working nuclear power station as reported by Utility Exchange and liquefied natural gas is still being shipped to the country to supply its gas fired power stations. These supplies would normally be delivered to Europe and the UK.

Household gas bills were down this year as a result of a mild winter and increases in energy saving by consumers.

Centrica said its own trading for the past year has been in line with expectations with higher wholesale gas prices and power prices helping its “upstream” operations.

The Queen’s Speech yesterday announced subsidies to help energy suppliers pay for green energy but these could force up electricity bills by as much as £200 a year.

The reform of the electricity market is designed to increase investment in low carbon energy generation and in doing so ensure the country’s energy security by bridging the energy gap.

Utility Exchange has reported in the past that there are concerns that unless there is a big investment in energy generation there may be an energy shortage as old coal fired power stations and old nuclear power plants are shut down. However, it will cost over £110 billion over the next ten years to ensure electricity generation continues and the lights don’t go out.

The Queen’s Speech introduced the Energy Bill which will reform the electricity market. It will bring in long-term contracts that pay new low carbon energy generators a steady rate of return. The reforms are designed to help with the high cost of building new nuclear power plants and offshore wind farms.

It has been reported that improvements to the energy market will increase energy bills by as much as £200 a year over the next ten years but the Government claims the reforms will increase bills by only £160 a year.

The Energy Bill, says the Government, will make electricity “secure, affordable and low-carbon” but The Daily Telegraph reports that it will bring in a number of subsidies to help pay for green electricity.

Energy companies will receive “capacity payments” to keep their power stations running as back up for wind energy. They will also receive “contracts for difference” which means the price of electricity will be artificially raised to make it worthwhile for energy companies to build nuclear power stations.

Energy suppliers will also be banned from building polluting coal fired power stations through another measure, the “emissions performance standard”.

While domestic energy bills are set to rise the measures will also hit businesses. Many are concerned that rising business electricity prices could force them to move their business abroad and make the recession worse.

The chairman of the Federation of Small Businesses, John Walker, said “Whilst we accept there is a need to stimulate investment in a new a generation of nuclear power stations and renewable energy infrastructure, small businesses have been subject to a remorseless increase in energy costs”.

He added, “It is essential that the reform of the electricity markets is accompanied by strong safeguards for consumers and measures to increase competition and break the dominance of the big six energy companies”.

The largest onshore wind farm in England and Wales has been given the go-ahead by the Government. The wind farm will be built at Pen Y Cymoedd and will be made up of 76 turbines. By the time it’s completed the wind farm should generate enough electricity for 206,000 homes.

In a press release, the energy minister, Charles Hendry, said “Onshore wind plays an important role in enhancing our energy security. It is the cheapest form of renewable energy and reduces our reliance on foreign fuel. This project in south Wales will generate vast amounts of home grown renewable electricity and provide a significant benefits package for the local community”.

The wind farm will be built by Vattenfall who said the development would provide benefits to the community including £6,000 a year per megawatt paid into a Community Trust Fund. The developer has also said it will provide £3m for the management of the local habitat and £350,000 for a cycle route.

The news comes after the Conservative chairman of the Commons energy committee, Tim Yeo, called for the Government to stop the delays in deciding where and when to build new wind farms and nuclear power stations.

He said any delays in decision making could result in the lights going out in Britain as the country faced electricity shortages.

There are concerns that as old fossil fuel powered and nuclear powered energy generation plants are shut down there will not be enough electricity being generated to keep the lights on. This is obviously not just a concern to homeowners but to businesses too. If there’s a shortage of electricity then business electricity prices may rise, pushing up business costs.

Speaking at the UK Energy Summit, the chief executive of E.ON UK, Tony Cocker, said that uncertainty in British energy policy meant “people will pause their investments” but the chief corporate officer of ScottishPower, Keith Anderson, thought differently. He said policy uncertainty would lead to short term decision making which would not help in the long term but added that the lights were “not going out”.

As part of a safety drive, Japan has now shut down all of its 50 nuclear reactors for maintenance. It’s the first time the country has been without nuclear generated electricity since 1970.

The news has been warmly welcomed by many Japanese people as they hope that the nuclear shut down will become permanent.

The news means that Japan will become even more reliant on imported gas and as a result wholesale gas prices could increase. If they do it could mean further increases in business gas prices as demand exceeds supply.

The reactors will undergo routine maintenance and before they can go back online they will have to withstand tests against earthquakes and tsunamis. Furthermore, local authorities will have to consent to the reactors being restarted.

Utility Exchange reported last year that the authorities were concerned that with the approaching summer there may be electricity shortages. There are similar concerns this year and several ministers are trying to win public support to get two reactors, taken offline earlier, restarted. However, the government may find it difficult to win support for restarting reactors.

The Japanese government’s national policy unit has forecast a 5% power shortage for Tokyo. At the same time energy suppliers are predicting a 16% shortage in the west of the country which includes the industrial city of Osaka.

The economy, trade and industry minister, Yukio Edano, said “I have to say we are facing the risk of a very severe electricity shortage”.

Electricity shortages could mean manufacturers in Japan have to cut production as higher business electricity prices force up energy bills. Japan’s move away from nuclear power may have an impact on not just its own energy prices but energy prices in the UK and elsewhere in Europe.

The BBC reports that the energy bill which proposes reforms in the electricity market will be delayed although this is denied by the Department of Energy & Climate Change (DECC).

According to BBC reports, MP’s say the government is putting a number of pieces of legislation on hold in order to make room for the House of Lords reforms. However, others say the legislation will be delayed because there’s no agreement between the political parties.

The DECC said the reports were “categorically untrue”. A spokeswoman said “We are committed to legislating for electricity market reform in the forthcoming session of Parliament”.

When the Electricity Market Reform White Paper was published in July last year, as reported by Utility Exchange, the DECC said that “the government intends to legislate for the key elements of this package in the second session of this Parliament which starts in May 2012”.

The electricity market reforms include proposals to increase investment in low carbon energy generation including wind farms, nuclear power stations and biomass plants. Proposals also include reforms to the feed-in tariff, a carbon floor price plan and a ban on coal fired power stations.

Reports that the bill may be delayed are not likely help investor confidence in sources of renewable energy and may influence whether wind turbine manufacturers choose to locate factories in the UK or on the continent

Delaying any decision on electricity market reform may increase concerns of an energy gap in the middle of the decade. Utility Exchange has reported in the past that as coal fired plants and aging nuclear power plants are shut down there are fears that there will be nothing to replace them with. This will lead to higher domestic and business electricity prices but concerns have been raised that as demand increases over the same period, there may not be enough generation capacity to cope.

The fact that the DECC has denied the BBC reports suggests that the proposals may appear in the Queen’s Speech but we will have to wait to see.

Centrica, the owner of British Gas, has bought a package of producing and development oil and gas assets in the Norwegian sector of the North Sea. Depending on the future production performance of the largest of the assets, Centrica will pay a further £61m.

Utility Exchange reported last November that Centrica was set to buy Statoil assets. The transaction adds 117 million barrels of oil equivalent reserves to Centrica’s Norwegian portfolio and there are good prospects for development. Centrica expects to increase production by 34,000 barrels of oil equivalent a day.

Furthermore, Centrica has announced that it has completed its acquisition of ConocoPhillips’ non-operated interests in the gas and oil producing Statfjord field as reported by Utility Exchange in January.

The deal, which cost £137m takes Centrica’s equity in the Statfjord to 34.4% and will add a further 36 million barrels of oil equivalent to its portfolio.

These two transactions, says Centrica, will increase reserves by almost 40% and they will increase production by over 30%.

While not initially impacting on business gas prices, the deal should help to improve the UK’s energy security.

The Managing Director of Centrica Energy, Mark Hanafin, said “These acquisitions mark an important step in Centrica’s strategy to grow its upstream business. As well as being one of the top three gas producers in the UK, we have one of the fastest growing companies in Norway, with around a third of our gas and oil production now coming from the region”.