Irish gas and electricity prices slump
New report shows supply now overtaking gas and electricity demand
The Irish energy market has seen wholesale gas and electricity prices slump during the past year, as supplies have risen as demand has dropped, according to a new report.
Energy trading firm Vayu revealed that gas prices fell by 30% since May 2013 while electricity prices have dropped by 12% in the same period.
The report also suggested that the slump in wholesale prices is expected to remain into the following month as well.
Mild conditions in 2014 have seen a massive decrease in gas demand, compared with last year.
The UK market has increased its supplies and storage of liquefied natural gas, meaning more gas is available for the Irish market.
The growing tensions in Ukraine have raised further concerns about potential disruption to the EU market.
“While markets remain sensitive to the situation in Ukraine and continue to factor a political risk premium into prices, there has been very little upward pressure on prices,” explained Joanne Daly, Vayu’s senior energy analyst.
“We’re seeing the prices of gas contracts further out than one month being dragged down by the prospect of reduced demand over the summer and lower requirements to build up inventories.
“This trend looks set to continue over the coming weeks and is particularly good news for businesses looking to take advantage of lower wholesale prices.”
It puts the current prices trading at levels last seen in 2011 and with weather conditions expected to improve, price changes are not expected in the coming months.
Increased shipments from energy suppliers in other countries are also helping to oversupply the market.
Currently, gas inventories in the UK are more than three times the level they were at last year and Vayu predicts that high rates of injection will continue.
The UK is Ireland’s major supplier of gas and helps to drive wholesale prices in the Irish energy market – meaning market conditions there are hugely influential on Ireland’s own markets.
Wind energy is also making a considerable contribution towards electricity generation in Ireland – generating more than 8,140 gigawatt hours of wind energy.
This represents 23% of total electricity demand for Ireland during the first four months of 2014.