Irish wholesale energy prices have recorded significant month-on-month decreases. The Naturgy Energy Review and Forecast for February 2019 shows Irish wholesale gas decreased by 18% on average compared to January 2019; with electricity prices 31% lower compared to the same time period.
The monthly report noted that temperatures above seasonal norms and oversupply in the system were the key factors causing the decrease in wholesale gas prices. Meanwhile, the fundamentals of the electricity market were much healthier this month, with renewables accounting for roughly 47% of the generation mix coupled with weakened demand due to the mild weather.
Commenting on the review, Naturgy Energy Analyst, Lauren Stewart, said: “While energy prices and in particular gas prices have shown significant growth up to year end 2018, we predict the outlook on prices for March to remain bearish with mild weather set to continue and security of supply continuing, due to LNG deliveries expected in the UK.”
“Wind generation was up 45% in February compared to last month and although the electricity market is tracking a bearish trajectory, plant outages that caused issue for prices in January are still in effect”, added Ms Stewart.
Gas Market Overview
After the NBP market dropped substantially in January, a bearish trajectory has continued in February as Day Ahead prices averaged at 47.6 p/therm, down 18% from the previous month with prices losing value by 12% since the beginning of February. Seasonal contracts also tracked downwards with Summer 2019 and Winter 2019 trading 7% and 4% lower by the end of the month. Similar losses in further out curve contracts did not occur due to gains in the wider energy complex.
Electricity and Wind Energy Update
On the 17th February, the Day Ahead price fell to the lowest recorded since the introduction of the new ISEM at 2.76 c/kWh. Strong wind output combined with a falling Day Ahead price saw Ireland export through the interconnector to GB, as it was the premium market. For February, SEM traded at a discount to the UK power market averaging at 5.48 c/kWh for the month.