3 reasons why energy prices are rising - Midlands 103
It's undeniable that the cost of energy is increasing. Since the beginning of April a total of three suppliers have upped their prices and have now committed to a second price hike in June.
The price increases from suppliers Pinergy, Flogas, and Panda Power are set to add hundreds of euro to energy customers' bills nationwide.
Our Head of Communications at bonkers.ie, Daragh Cassidy joined Will Faulkner on Midlands 103 to discuss what's behind the latest prices increases and what consumers can do to help offset any rise in their bills.
Here’s an outline of the main points discussed by Daragh in the interview.
Why are prices increasing?
There are three main reasons to explain why energy prices are increasing:
- The price of fuel, particularly gas and coal, has increased on wholesale markets in recent months as the global economy recovers and demand for energy increases.
- There’s a lack of wind output in the system over the past few weeks, as it hasn’t been as windy as was forecast. Renewable energy in general can be tough to forecast in advance.
- Some charges have recently been increased by Ireland’s independent energy regulator, the CRU, to help finance investment in the grid. These are charges that the suppliers pay EirGrid and Gas Networks Ireland for managing the grid.
How is my energy bill broken down?
If you’re receiving your next energy bill soon, it’s important to be aware of how it’s broken down.
- Around 20% of what you pay goes straight to the government in terms of things like the PSO levy, the carbon tax on gas and also VAT.
- Around 40% goes towards the cost of the fuel. This is the coal, gas, peat and oil that we burn to generate our. electricity.
- Around 30% goes towards the network charges that EirGrid and Gas Networks Ireland charge to suppliers for maintaining the grid.
- The remaining 10% goes to the actual supplier in terms of profit, or the money they need to maintain the running of their business.
So, if the price of gas or coal goes up, it’s really going to impact your pocket because it takes up 40% of energy bills.
Switch and save!
Are you worried about the increasing cost of energy? Make sure you consider all options. You can easily compare and switch to a cheaper supplier on bonkers.ie.
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 13 energy suppliers nationwide.
If you’re looking for more information on why energy prices are increasing, take a look at our recent blog post on the topic. Alternatively, 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.