Gas and Electricity Prices Decrease Significantly Year-on-Year
- Wholesale gas prices were 66% lower last month, compared to September 2018
- Electricity prices also decreased significantly, by 38% year-on-year
- Day-Ahead gas prices dropped to a ten-year low at the beginning of September 2019
- Healthy gas supplies, high storage levels and winds contributed to the significant fall in prices
4th October, Irish wholesale gas and electricity prices have decreased significantly compared to the same period last year, according to the latest Naturgy Energy Review and Forecast.
The September 2019 report shows wholesale gas prices were 66% lower in September, compared to September 2018, while, electricity prices dropped by 38% during the same period.
The month-on-month figures also show a downward trend. Wholesale gas prices were down by 10% in September 2019, compared to August 2019, while electricity prices decreased by 3% over the past month. Day-Ahead gas prices dropped to a ten-year low at the beginning of September.
Naturgy Energy Analyst, Lauren Stewart said robust supplies of gas, high wind generation, and strong output from renewable generators are all contributing to the dramatic drop in prices.
“This is good news for businesses. Not only have gas and electricity prices decreased month-on-month; prices fell significantly year-on-year.
“Gas storage stocks and healthy supply in the UK are having a positive impact on prices for Irish businesses. Gas storage stocks are currently almost 100% full, which is unusual for this time of year and a postivive situation to be in, as we head into the winter months.
There are strong indications that Liquified Natural Gas (LNG) deliveries into GB will pick up during October, which ought to have a softening impact on prompt prices in the near term. With Asian prices for LNG also depressed, currently up to 10 LNG cargoes are scheduled to arrive during the first half of October, which is a significant increase on the numbers seen in August. This should lead to strong send-out of LNG into the grid, which would mean that system oversupply could be a regular occurrence, given the health of storage stocks as well.
Wholesale electricity prices decreased by 3% month-on-month, averaging at 4.41 c/kWh. Falling NBP gas and carbon markets, coupled with high wind generation on the system (average 1,273 MW) all contributed to keeping prices down. Average wind generation in September was marginally higher than the previous month.
“The new SEM (Single Electricity Market) was introduced 12 months ago and there were a few months of volatility in the new market. However, from February 19 we have since seen a decrease in electricity prices. Wind has now a much bigger influence on the price of electricity then ever before,” said Naturgy Energy Analyst, Lauren Stewart
“Overall, the outlook is positive as we head into the winter months. Whilst the last few months have seen prices soften significantly, it remains to be seen whether this trajectory will stabilise as seasonal demand pressures will be applied to the system” she added”.
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