Business

Sharp drop in wholesale gas and electricity prices - yet bills are up

Wholesale gas prices in the north fell by 5.2 per cent over the last month and were down 55 per cent on the same period last year, according to Naturgy
Gary McDonald Business Editor

WHOLESALE gas and electricity prices in Northern Ireland decreased by 55 per cent and 25 per cent respectively compared to the same period last year, according to the latest review and forecast by energy supply firm Naturgy.

And on a month-by-month basis, the report shows that wholesale gas prices fell by nearly 5.2 per cent while electricity prices registered a decrease of 6 per cent.

The review shows that while August was another somewhat volatile month for the trading of wholesale gas, strong wind output and warmer temperatures helped alleviate pressure coming from supply issues due to planned and unplanned outages at a number of key facilities.

Naturgy energy analyst Lauren Stewart said: “With wind output expected to remain low in the near future and with reduced Norwegian imports and LNG vessels, there is the potential for some upward pressure on prices as we head into the winter period.”

With regard to electricity, she added: “August saw a healthy supply of renewable electricity to the system which accounted for 31 per cent of generation.

“This is up 46 per cent on the July average, and coupled with falling carbon and gas prices, contributed to the month on month decline in prices.”

The Naturgy findings, however, follow closely from the north's two biggest energy supply firms announcing inflation-busting price hikes.

On August 15 Power NI, which is part of the Energia Group and which supplies electricity to more than half of the north's homes, confirmed it was lumping an extra 6.1 per cent on to bills from October 1, adding 67p a week on a typical household electricity bill.

It blamed the rise on costs coming from the electricity network provider and market operator, which it said will impact all electricity suppliers.

Then last Friday SSE Airtricity, Northern Ireland's second largest provider of electricity (it supplies 170,000 homes), confirmed that its standard household electricity prices will increase by 6.9 per cent, or 75p a week.

The company acknowledged that reductions in wholesale energy costs "have been negated by external cost increases applied to all energy suppliers”.

In its latest report, Naturgy described July as "a bearish month" for electricity prices, with a 25 per cent year on year average reduction to 4.23 p/kWh.

Wind generation averaged at 1181 megawatts, up 46 per cent from the July average, subsequently accounting for the 8 per cent month on month decline in prices.

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