Irish Wholesale electricity and gas prices increased by 10% and 8% respectively over the last month according to the Naturgy Energy Report. From a domestic perspective, the recent odourless gas incident at the Corrib gas field resulted in an unplanned outage which resulted in gas prices increasing in the UK market. The strengthening of sterling over the euro during the last month has also had an impact on gas prices in Ireland.
Wholesale energy prices are considerably higher than 12 months ago. An increased level of maintenance and outages at gas fields and processing plants across Europe have resulted in wholesale gas prices increasing by 50% and wholesale electricity prices by 28% compared to September 2016.
Commenting on the increasing prices, Naturgy Senior Energy Analyst, Keith Donnelly, said that “the supply volatility caused by maintenance and unplanned outages in gas fields and plants in Norway was the main driver behind a 10% increase in gas prices from August to September. Irish customers were not only exposed to the increasing gas prices, a faltering euro against sterling added to price pressure in euro terms. September saw an increase in wind generated power on the island of Ireland. However, the increase wasn’t enough to neutralise the impact of the rising cost of gas on the power market as prices there also rose by 10% when compared to last month.
“The Corrib gas field experienced its first unplanned outage since becoming operational in January 2016. Odourless Gas from the field entered the Irish transmission system, causing an emergency shut down of production at the plant. The outage added some bullish sentiment to the UK market as demand increased at the UK to replace the gas lost due to shut down at Corrib.
Looking forward a number of issues at French nuclear power plants are threatening to cause havoc with energy markets again this year as gas prices rallied once news of a shutdown at the Tricastin plant was reported. Gas is being sourced to replace the power lost due to the closure of generating units at the plant. This, combined with the UK facing its first winter without the large gas storage facility, Rough, means that businesses should be prepared for a very volatile market in the coming months,” concluded Mr Donnelly.
In euro terms, Irish wholesale gas prices are over 50% more expensive on average this month compared with August 2016. Maintenance and outages at gas fields and processing plants have helped to drive prices upwards. Prices have also been even more bullish for Irish customers due to the slight weakening of the euro when compared to sterling over the last few weeks.
The average day ahead price for gas, the contract for gas delivery tomorrow, is 1.76 c/kWh (cents per kilowatt hour) for September. This compares with an average price of 1.14 c/kWh in September 2016.
Irish wholesale gas prices are 3% higher (in euro terms) compared with the average monthly price recorded for September over the previous three years (2014-2016).
Electricity and Wind Energy Update
The average wholesale price of electricity in the Irish market in September is 4.63 c/kWh, an increase of 28% compared with September 2016 and up 10% on last month. The in-crease in prices can be attributed to the rise on the gas market, while the continued strong levels of wind generation has limited that uplift, somewhat. Wind generation as a percentage of total generation, has risen by over 25% com-pared with wind generation last month.