Wholesale electricity prices down 52% in October - Today FM

Image audioWholesale electricity prices down 52% in October - Today FM

Daragh Cassidy appeared on The Last Word on Today FM to discuss the wholesale gas and electricity market and why we haven’t seen our energy costs fall, despite a fall in the wholesale price.

Listen back to the interview above or take a look at the main points discussed below. 

Main points from the interview

  • According to the Central Statistics Office, wholesale electricity prices have gone down by 52% in October compared to September. People may be wondering why they’re not seeing this reflected in their energy bills. 
  • The main reason is that we pay an average price for electricity over 12 to 18 months. It’s a blended price. 
  • This is because energy suppliers buy energy at various times throughout the year, so we don’t have huge fluctuations in our bills. This is called ‘hedging’. 
  •  If we are going to see our energy bills decrease, then wholesale prices must remain at reduced levels for months. This is not a certainty though. 
  • October was unusually warm across Ireland and Europe so less gas was used, and we had good wind output.
  • Ireland has zero supply, as most of our gas comes through the UK. The storage facilities have been at maximum capacity due to the mild October we had. 
  • This meant the spot price, or the current price, did tumble. However, the future price didn’t fall. 
  • The average annual gas and electricity bill is at a record high of around €4,000. 
  • Not so long ago it seemed as though prices would increase again by 40-50%, however now that may not happen.
  • In terms of petrol and diesel prices, the delays in prices decreasing shouldn't be so long. When the price goes up, the forecourts are quick to pass on this increase, but not so quick to lower prices when they come down.
  • Oil is priced in dollars and the Euro has fallen by around 20% over the past 12 months, which also isn’t helping. We’ve also had an increase in carbon tax. 
  • The decrease in excise duty seems to have been eaten up.

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