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Markets & Trading This week Blackout 'fear tactics' may hinder DSR drive Tempus says 'bad news story about not having enough generation' ignores the benefits of DSR Tempus Energy has slammed critics of National Grid's demand-side response (DSR) campaign, saying "fear tactics" over the UK's generation capac- ity threaten to undermine "valu- able" business opportunities. Tempus chief executive Sara Bell told delegates of a London conference the "bad news story about not having enough generation" when DSR is used ignores the benefits for companies and the economy. National Grid used its demand-side balancing reserve (DSBR) for the first time on 4 November to shave peak demand while ramping up generation to balance the sys- tem. Companies that have signed a DSBR contract with National Grid agree to reduce their use of grid generation during peak demand hours if the system is under stress. But the national press criticised the move as being anti-business and a sign of an ineffective electricity system, saying National Grid "demanded" that workers "down their tools" to prevent a blackout. "Those customers were not forced to turn off," Bell said. "They saw a valuable business opportunity and chose to move non-critical load to a lower price period." Many companies are able to reduce non-essential energy use, including air-conditioning and refrigeration, for short periods of time without reducing productivity, supporters of DSR argue. Bell said those with vested interests in centralised energy investment are resorting to "fear tactics" to "hold on" while the energy system shis towards an increasingly decentralised model. JA ELECTRICITY Npower extends flexible contracts Npower Business Solutions is extending flexible contracts to mid-market business customers for the first time, allowing them to change prices mid-contract as market prices change. The supplier said the online product, called Flex: Begin, is a first of its kind self-serve product for the mid-market business customer, with flexible contracts previously only being available to major electricity users. The flexible tariff will be able to be used in two ways. A simpli- fied "multiple" contract will offer a fixed-term contract, such as two years divided into four six-month blocks, for customers to transact when they choose. The contract will also provide price alerts to customers to pro- vide protection against a rising or falling wholesale market price. The more "tailored" option allows customers to work to their own risk-management strategy, using regular market intelligence to guide them. Customers using the product will have access to Npower Business Solutions' risk management tool, which provides comprehensive wholesale market information. Npower Business Solutions' innovation manager Magali Hodgson said: "The features of this platform are designed to support businesses in making clear, informed decisions on the best time to transact their electricity requirements, with live Npower prices and helpful regular market intelligence." GAS Demand to rise 30% as temperatures dip Colder temperatures across western Europe this week will cause demand for domestic gas heating to surge 30 per cent. A mild start to Europe's colder months has capped heat- ing demand so far, but by the end of the week temperatures in the UK, Belgium, France, Germany and the Netherlands will fall below the norm for this time of the year, according to fresh analysis. Data analysts at Eclipse Energy, a unit of market infor- mation specialist Platts, have said they expect the colder than average weather to drive gas demand as much as 30 per cent higher and li gas market prices across the regional markets. "Colder weather than of late will spread across the UK over the weekend, bringing overnight frost and temperatures down below normal for this time of year," says the UK's Met Office. Platts said gas for delivery this week was valued between 35.50 pence/therm and 36.00p/th on Monday, while gas for deliv- ery next week traded more than 5 per cent higher at 38.00p/th. Many firms can reduce non-essential energy use Tricks of the trade Jillian Ambrose "The IEA predicts that oil prices will remain low" This week the price of Brent crude slipped back further towards the $44/barrel mark fol- lowing news that US oil invento- ries remain high despite months of cripplingly low oil prices. Increasingly it seems that Opec's war on US shale is failing. And it's a different picture to the one painted just over a year ago. Opec's decision to maintain output despite an inevitable crash in prices at first seemed set to deal non-Opec producers that prices will remain at between $50 and $80/barrel until the end of the decade. It's not great news for energy profit margins, but Opec is also feeling the pain. Its revenues have almost halved from US$1 trillion a year ago to US$550 billion. Venezuela is expected to use a "candid, informal" meeting on 3 December to push for a price floor of $70/barrel, which would support gas prices too. How Saudi Arabia reacts to candour remains to be seen. a death blow. Opec may be able to take the pain of $50/barrel price levels but upstart produc- ers were expected to fold under the pressure, leaving the likes of Saudi Arabia free to maintain oil market dominance. But this month data showed that US inventories are still abundant. US production has slipped from 9.6 million barrels to 9.1 million, and is expected to fall further to 8.8 million. But such a small dent is far from crushing. What does this mean for European energy players? Unless Opec decides on a change of course at its next meeting on 4 December, the IEA predicts UTILITY WEEK | 20TH - 26TH NOVEMBER 2015 | 27