10 January 2019: Irish wholesale gas and electricity prices have registered significant year-on-year increases with gas and electricity prices up 9% and 33% respectively. However, the Naturgy Energy Review and Forecast for December 2018 shows Irish wholesale gas decreased by 1% on average compared with the previous month; with mild winter temperatures and the security of supply seen as stabilising factors for the decrease in price.
The monthly Naturgy Irish Wholesale Gas and Electricity Forecast also shows that electricity prices have increased by 12% on a month-on-month basis, due to the intermittency of wind on the system, which is down roughly 9% from the previous month.
Commenting on the review, Naturgy Energy Analyst, Lauren Stewart, said: “While energy prices have shown significant growth year-on-year, a recent convergence of events of temperatures above seasonal norms, high levels of storage and falling oil prices have meant gas prices remain bearish.
Meanwhile, electricity prices are seeing a steady increase. However, as the Integrated Single Electricity Market (I-SEM) completes its third month of trading, we expect the system to further embed itself in the market and further increase competition” added Ms. Stewart.
Gas Market Overview
Wholesale gas prices lost value by 1% month on month in December. Bearishness in the market can be largely attributed to a mild winter to date. Security of supply also has been a stabilising factor for prices, as storage sites across Britain have remained 95% at capacity, which is in stark contrast to expectations at the beginning of the summer. A strong injection into storage in October from LNG deliveries means that storage sites across the UK are holding circa 1.3 bcm of supply currently. Typically, shippers keep storage levels well stocked and hold off on withdrawals in preparation for a cold January and February. Mild weather and healthy supply has also contributed to a lack of storage level depletion during the end of 2018 and has also made it easy to keep stock levels at capacity.
Electricity and Wind Energy Update
Ireland’s new wholesale electricity market is now in full swing in its third month of trading. I-SEM is designed to encourage competition in the market by optimising use of cross border transmission assets. As with any new market, there is a bedding in period. On average electricity prices have risen 12% month on month. Prices have been quite volatile day to day due to the intermittency of wind on the system which is down roughly 9% from the previous month. Bullishness in the carbon market and several unplanned plant outages across the country also contributed to an uptick in prices.