Business

Gas inflation warning as wholesale price soars by 30 per cent

An oil and gas platform, shown here as Vayu reports a 30 per cent monthly increase in wholesale prices in Ireland in May
Gary McDonald Business Editor

WHOLESALE gas prices have soared by 30 per cent since last May, according to the latest monthly trade data from Irish-owned energy supplier Vayu.

And it's not much better for buyers of electricity, where wholesale prices in Northern Ireland were 26 per cent higher on average last month compared with May 2016.

The authors of the monthly industry bellwether say the upcoming general election and currency fluctuations may have an impact on energy prices for many Northern Irish businesses

Wholesale prices have found a natural floor in May according to Vayu, and the resistance to push lower has proven difficult to break through.

Compared to this time last year the euro is also trading at a stronger level, making wholesale power price more expensive for Northern Ireland businesses.

Vayu senior energy analyst Keith Donnelly said: “The euro is trading at a stronger level than this time last year, making the euro based wholesale power price more expensive for Northern Irish businesses.

"Foreign exchange is key at the moment with Brexit negotiations still on the horizon, and a comprehensive win for Theresa May in Thursday's election could mean a rally for sterling making power cheaper for Northern Ireland.”

He added: “A win for the Conservatives will result in a strong pound and maybe some respite to the high power prices for Northern Irish businesses, while a good showing from Labour will restrict that movement somewhat.

"Fundamentally, everything from temperature-driven demand to supply is as would be expected for the summer period.”

The Vayu monthly energy report also contains an update on the Irish wind energy sector.

Total wind generation capacity in Ireland now stands at 3,736 megawatts, with wind energy accounting for approximately 20.6 per cent of overall electricity generation on the island of Ireland in May, it said.

It reached a peak of 2,751 megawatts on Friday May 5,which had the potential to meet more than 61 per cent of total electricity demand on the island of Ireland at that time.

Dublin-headquartered Vayu has operated in both Ireland and the UK since 2003 and launched its electricity supply business in 2007. Last year the company was acquired by Spanish utility giant Gas Natural Fenosa.

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