Bord Gáis Energy has announced that it’s raising its energy prices once again, having recently increased prices in August. The move will impact around 350,000 electricity customers and 300,000 gas customers.
Customers of Bord Gáis Energy (BGE) will be disappointed, but likely not surprised, to hear that the supplier is set to increase prices once again.
The news comes just days after Energia announced its third price increase of the year.
The latest price increase from BGE will see the unit price of gas increase by 12% and the unit price of electricity by 10% from 24th October.
BGE only last increased its prices in August, when it raised the price of its electricity by 12.5% and its gas by 14%.
The impact on household bills
The average household with BGE will see gas prices increase by approximately €8.16 a month and electricity prices increase by around €10.26 a month.
This is the equivalent of an additional €98 a year for gas and €123 for electricity, which is not an insignificant amount.
These figures are based on an average household energy usage of 4,200 kWh per annum for electricity and 11,000 kWh per annum for gas, as defined by the Commission for Regulation of Utilities (CRU).
When all this year's increases are taken into account, customers are looking at paying around €340 a year more for their electricity and €200 for their gas.
While the price increases from Bord Gáis Energy are quite high, some of the smaller energy suppliers have announced even bigger price increases which will add around €700-800 a year to the average household's energy bill.
No further increases until 2022
Despite the price hike, Bord Gáis Energy has guaranteed that it won’t be increasing prices again until at least spring 2022, which should be of some comfort for energy customers.
Dave Kirwan, Managing Director of Bord Gáis Energy, said the company was seeing an extremely uncertain energy market right now.
We regret that we have to pass through a price increase at this time, but we have taken steps to protect our customers against further movement during the colder winter months ahead.
Bord Gáis Energy has also confirmed that it will pass on any savings and reductions to customers if possible when and where it can.
Why are energy prices increasing?
There’s no one reason why we’re seeing such extreme price increases in the energy market at the moment. It comes down to a number of factors and bad timing, which has created the perfect storm for an energy crisis.
- Fossil fuels - The price of gas and oil and coal on wholesale markets has skyrocketed over the past few months, with the price of gas increasing by over 200%. This feeds into electricity prices as around 40-50% of our electricity is still generated from burning gas.
- Inadequate weather conditions - We’ve had a very calm summer so it hasn’t been as windy in recent months as it usually would be. This has put pressure on the network as we weren’t able to rely on wind energy as much. According to the World Climate Service, June and July of this year was one of the least windy periods on record in Ireland.
- Gas-fired power plants - The closure of two large gas-fired power plants has also put pressure on prices as it’s reducing the supply of electricity into the grid. These are out of action due to routine maintenance and cleaning, but there have been delays in getting them up and running again.
If you want to know why suppliers are increasing prices so much, you can learn more in this blog.
An energy price cap
The news of BGE’s price increase has coincided with an ongoing debate about whether or not the Government should introduce an energy price cap.
There’s a similar maximum price order on energy in place in the UK and in recent weeks it’s emerged that companies are going out of business because of it. If this is implemented here, the results could be similar, which we don’t want to see as people will lose their jobs.
Instead of capping prices, there’s an easier solution and that’s looking at the amount of money the Government takes from energy consumers. On a yearly basis, the Government takes around €80 in carbon tax, around €60 for the PSO levy and around €300-400 in VAT.
The Government could easily reduce VAT, which is what the Spanish government has done and they could also reduce the carbon tax and PSO levy.
Switch and save
Are you worried about the rising cost of energy and heating your home this winter? Have you considered switching to a cheaper supplier?
It’s quick and easy to switch and can all be done on bonkers.ie in the space of a few minutes. Use our energy comparison tool to compare the best deals today across all 14 energy suppliers nationwide.
If you’re seeking advice when it comes to switching, have a look at our guide on 7 things to consider when switching energy supplier or have a read of some of the most frequently asked questions about the energy switching process.
If you are still in contract and don’t want to pay an early exit fee to switch supplier, consider adjusting your habits around the home to reduce your energy consumption instead.
Get in touch
If you have any questions about Bord Gáis Energy’s price increase or switching supplier, let us know and we’d be happy to help.