Ireland’s energy watchdog has said it expects gas and electricity prices for domestic users to start falling within weeks as a result of the decline in the cost of oil and gas on international wholesale markets.
The State’s gas network operator, meanwhile, does not expect disruption to the supply of natural gas this winter.
While the Commission for the Regulation of Utilities (CRU) said that, globally, energy prices remained high, it anticipates that a fall from the highs recorded in 2022 would be passed on to Irish consumers before the end of the year.
The CRU has no role in setting the prices imposed by individual providers, but a spokesman told The Irish Times it “continually monitors the marketplace to ensure that it continues to function as required under EU legislation and that customers benefit as much as possible from competition”.
He said most customers were protected from the worst impacts of the volatility and extreme high prices of gas in 2022, when wholesale gas prices peaked at more than 10 times the historic norms, “through hedging by suppliers, where suppliers buy futures contracts for gas ahead of time”.
He noted that the impacts of hedging “take time to work through to retail prices and this will vary from company to company, based on their current hedging and retail price positions”.
“While wholesale gas and futures gas prices still remain higher than historic norms, the CRU would expect the effect of the high futures prices from last year to expire and to see some movement on prices in the last quarter of this year,” he said.
The leading energy providers have all remained tightlipped about their plans for the autumn and winter months.
They said they would keep their prices under review and suggested that their hedging policies had protected consumers from even more severe prices hikes people have experienced over the past 18 months. Most consumers have seen energy costs more than double since the start of the cost of living crisis, which started in 2021.
Meanwhile, Gas Networks Ireland does not expect disruption to the supply of natural gas this winter.
The EU Commission announced last week that the bloc had reached its gas storage target two months ahead of schedule. Under the REPowerEU strategy rolled out in March 2022, member states set a goal of reaching 90 per cent of storage levels by November 1st each year as Europe continues to deal with the loss of Russian supply after the invasion of Ukraine.
Storage levels reached 90.1 per cent capacity as of August 16th, the commission announced last week, the highest level since 2016 when records began.
The vast majority (79 per cent) of Ireland’s natural gas is imported from Scotland, with the remaining 21 per cent coming from the Corrib gasfield.
UK gas storage facilities are currently at 95 per cent capacity, said Bobby Gleeson, acting chief operating officer at Gas Networks Ireland. “Based on the assessment of the gas supply sources to Ireland, Gas Networks Ireland does not envisage any disruption to gas supply during the winter months.”
However, he said wholesale gas prices – and ultimately, the energy prices paid by consumers and businesses – are correlated to price movements in the UK. “There are multiple factors influencing the wholesale price at any point in time, but fundamentally it is supply – including gas storage reserves – and demand,” Mr Gleeson said.
Ireland is “almost unique” in Europe in that it has no gas storage facilities, he said. “The Government is currently in consultation on its Energy Security of Supply Review and is considering a number of options to address the significant risk of an interruption to Ireland’s energy supplies either through economic or physical disruption factors. A number of options which would enhance the security of Ireland’s gas supplies are under consideration, and Gas Networks Ireland welcome all solutions which will help meet this goal.”
