Ben Ablewhite from Now Then Energy shared his insights on energy and agriculture, drawing from his diverse background in economics, and his years of experience in the energy sector. With a focus on commercial greenhouses, he explains how energy pricing and procurement strategies are evolving in the UK.
Background and experience
Ben holds a degree in economics and has worked across various industries, including banking, IT, and energy. Initially at NFU Energy, Ben joined Tim Pratt as a partner at Now Then in 2022 where he supports commercial greenhouses in managing their energy needs. "We cover a lot of ground, from energy contracts to compliance and technical consultancy work," he explained. His team acts as an extension of the greenhouse operations, assisting with all operations from energy trading to running combined heat and power (CHP) systems.
Current energy situation in the UK
When asked about the current energy landscape, Ben described it as the "new normal." He noted that while wholesale prices are higher than pre-pandemic levels, they have stabilized compared to the peaks experienced during the energy crisis. "The level of variance, though greater than pre-2020, is something people can tolerate now," he stated, indicating that growers have adapted to the new pricing dynamics.
Ben elaborated on how growers are increasingly inclined to fix their energy prices, a shift from previous trends where floating prices were preferred. "After the rollercoaster of the energy crisis, there's now a greater appetite for fixing prices," he said. This change is particularly evident as growers seek to stabilize their energy costs alongside their crop prices, creating a more predictable financial landscape.
Seasonal considerations
As winter approaches, Ben noted that forward energy pricing for the coming months is currently relatively flat, suggesting few concerns over supply. This stability can be beneficial for growers, as it allows them to plan their budgets more effectively.
He also highlighted the importance of hedging, suggesting that many growers are now more proactive in securing their energy costs for the winter months. "There's risk built into forward pricing, and if you leave it floating, you might end up paying more," he warned.
Future outlook
Looking ahead to 2025, Ben acknowledged the uncertainty of energy markets. He mentioned two significant drivers: geopolitical factors and storage levels. "If something happens in the Middle East, for example, it tends to push gas prices up. But currently, storage levels in Europe are high, contributing to steady pricing," he explained.
He also pointed out that the state of the Chinese economy plays a significant role in global energy prices. "When China tops up its reserves, it can impact near-term pricing significantly," he noted, emphasizing the interconnectedness of the global market.
Energy supply trends
Ben discussed current trends in energy supply, particularly concerning greenhouse operations. "We work with many greenhouses operating combined heat and power engines," he mentioned. Despite the push for sustainability, natural gas-fuelled CHP systems remain commercially viable for many growers.
He also touched on the growing interest in renewable energy sources like green hydrogen and anaerobic digestion, although he noted that the latter currently lacks sufficient economic support in the UK. "There's a lot of interest in finding net-zero solutions, but the technologies are still expensive," he added.
Resilience in the industry
Reflecting on the energy crisis's impact, Ben observed that many greenhouses adapted successfully. "Those that had invested in their energy infrastructure were in a much better position and ultimately less exposed to the unforeseen changes in the wholesale market than others," he stated. This resilience suggests that while challenges remain, there is a path forward for the agricultural sector in managing energy needs effectively.
In conclusion, Ben's insights paint a picture of an evolving energy landscape where growers are becoming more strategic in their approach to energy management. As the industry adapts to the "new normal", the lessons learned during the energy crisis may lead to more robust and resilient agricultural practices in the future.
For more information:
Now Then Energy
Ben Ablewhite
+44 (0) 7967215275
Email: [email protected]
www.nowthenenergy.co.uk