UK businesses and consumers could be faced with increases in gas prices this coming winter.
Sabien Technology has suggested price rises per therm will be partly dictated by the increasing costs added to energy bills to pay for the UK's climate change policy.

Alan O' Brien, CEO at Sabien Technology, said: 'Government figures suggest its climate policies will add 26 per cent to the energy bills of medium sized firms by 2020. At the core of rising prices is the fact that wholesale gas is now a global market, especially with the emergence of liquefied natural gas (LNG). As with all global markets, the prices will be driven by the highest payer and demand.'

Analysts and commentators point to the decrease in gas supply from the UKCS (UK Continental Shelf), which requires the UK to import from continental Europe or import LNG.

Mr O'Brien continued: 'With emerging superpowers India and especially China consuming more and more gas, we are in effect competing with Asia for LNG cargo. Over in Europe, some of the buyers of electricity and gas will be impacted by the increase of oil prices due to the fact that the European gas purchase contracts are to a certain degree indexed to the price of oil. Our mature market and non-oil-indexed wholesale gas arena suggests the increasing oil price will not directly impact on UK gas prices. However, there is a key caveat at work here - as the UK increases its imports the oil index continental prices will increase prices in the UK.'

Mr O'Brien also warned that if the political unrest in the Middle East continued, then UK consumers could feel the pinch this coming winter. He said: 'The increase in wholesale gas prices and ultimately the price the end user pays on their bills can be reduced significantly by no or low cost initiatives.

'For example behaviour changes are relatively low cost or no cost to implement and retrofit energy efficiency technology - such as that produced and installed by Sabien - can deliver cost savings, CO₂ reductions with paybacks under 18 months - with no impact to the buildings operation.'

Sabien also outlined addition core factors which could precipitate price rises including:

• Gas is a relatively low carbon fuel, therefore it is more attractive than oil and coal, again a higher premium can be demanded
• Nuclear is losing its appeal across the globe following the Fukushima disaster, resulting in more demand for gas/LNG
• The UK Government may build CCGT power stations (combined cycle gas powered stations) which will increase the demand for gas and therefore could increase the wholesale gas price
• As the economy recovers and manufacturing output increases, demand will increase and ultimately prices.