Energy bill are likely to increase due to concerns that Japan will seek to buy more gas following the explosion at the Fukushima nuclear plant. Traders warn that Japan may buy the liquid petroleum gas (LPG) that otherwise would have ended up in Europe.
You can read more of the story here: Energy bills driven up by battle for gas.

The managing director of British Gas Phil Bentley said that energy bills are likely to keep going up because the price of gas on the international market is rising.

David Cameron, the Prime Minister, and Chris Huhne, the Energy Secretary, this week called together the UK’s largest energy suppliers and consumer groups for a summit. The Prime Minister wanted to “crack some heads together,” said one Government source.

However Mr Bentley said that the “inconvenient truth” is that energy prices will continue to rise.

“In my opinion unit prices will only go one way unless someone discovers huge amounts of gas and imports it into the UK. The international price for gas, I am afraid, is going up,”

Mr Huhne also predicted that prices will rise.

E.ON has made an ‘encouraging’ gas discovery after drilling in the North Sea.

Chief executive officer of E.ON’s exploration and production arm, Frank Siversten, said in a statement ‘We are pleased to announce a successful UK gas discovery. This result is another important step for our upstream business’

E.ON E&P managing director in the UK Felix Lerch said. ‘The results are very encouraging and will be incorporated into ongoing studies to assess the optimum development strategy for this discovery,’

Goldman Sachs has been recruited by Eon to enable them to sell their gas distribution network (Open Grid Europe) for up to €2.5bn which will to help pay down its debts and shift its focus away from Europe.

Open Grid Europe is the operator of over 12,000km of pipeline in Germany and is a subsidary of Eon’s gas supply unit Ruhrgas, Germany’s biggest gas importer.

Buyers are likely to be financial investors, similar to those that have been drawn to other transmission unit sales by utilities, as well as strategic buyers.

Johannes Teyssen, chief executive, plans to sell €15bn of assets by the end of 2013.

The company is to cut up to 11,000 jobs in a bid to save €1.5bn every year until 2015, thereby reducing Eon’s controllable costs to an annual maximum of €9.5bn.

As the operator of six of Germany’s 17 nuclear plants, the Düsseldorf-based utility is the biggest investor-owned nuclear energy company in Europe.

50% more electricity has been generated by renewables such as hydro, wind, solar and other sources than in the same period last year and now generates nearly 10% of all electricity in the UK.

There is other good news in the latest quarterly energy figures at least in terms of carbon emissions:

electricity consumption was 1½% lower than in the second quarter of 2010

fossil fuel dependency was at a record low of 85.7 %

the supply from coal in the second quarter of 2011 fell 2.3%, gas decreased by 18.3% and nuclear rose by 38.3%

in the second quarter of 2011 renewables accounted for 9.6% of electricity supplied, whilst nuclear supply exceeded 20% for the first time since the second quarter of 2006

the total electricity supplied by all generators in the second quarter of 2011 was 1.7% lower than a year earlier

final consumption of electricity for domestic use decreased by 3.7%.

This will all have the positive consequence of having reduced overall carbon emissions in the last year.

But prices have been rising. Average industrial gas prices, including the Climate Change Levy (CCL), were 34.1% higher in current terms in Q2 2011 compared to Q2 2010, whilst prices excluding CCL were 35.4% higher.

Wholesale gas prices are expected to continue to rise, with forward market prices trading at 76p/therm in 2016.

The truth is that fossil fuel price volatility has been, and is expected to continue to be, a bigger driver of energy price variations than the impact of energy and climate change policies.