2 September 2019: Irish wholesale gas and electricity prices decrease by 55% and 27% respectively compared to the same period last year, according to the latest Naturgy Energy Review and Forecast. The report shows that wholesale gas prices fell by nearly 5.2% on month-by-month basis while electricity prices registered a decrease of 8%.
The review shows that while August was another somewhat volatile month for the trading of wholesale gas, strong wind output and warmer temperatures helped alleviate pressure coming from supply issues due to planned and unplanned outages at a number of key facilities.
Commenting on the review, Naturgy Energy Analyst, Lauren Stewart, said: “With wind output expected to remain low in the near future and with reduced Norwegian imports and LNG vessels, there is the potential for some upward pressure on prices as we head into the winter period.”
With regard to electricity, “August saw a healthy supply of renewable electricity to the system which accounted for 31% of generation. This is up 46% on the July average and coupled with falling carbon and gas prices contributed to the month on month decline in prices”, added Ms. Stewart.
Irish wholesale gas and electricity prices decrease by 55% and 27% respectively.
Gas Market Overview
In terms of LNG, arrivals remain extremely limited when compared to earlier in the year. Some data suggests that there could be three LNG cargoes arriving into the UK by 7 September, however this is based on predictions which so far have not been confirmed. Prices for winter delivery contracts have also been volatile of late due to movements in the wider energy complex. At present, storage levels are high and once the current maintenance season comes to an end, supply heading into the winter will look strong. However, previous reports suggested an uptick in LNG deliveries into the UK from September, but this has yet to materialise.
Electricity and Wind Energy Update
It was a bearish month for electricity prices with a 27% year on year average reduction to 4.61 c/kWh. Wind generation averaged at 1172 MW, up 45% from the July average subsequently accounting for the 8% month on month decline in prices. However further losses in electricity prices were likely capped by the prevalence of offline capacity and planned maintenance on the East-West Interconnector. Offline capacity calls into question security of supply and pressure is put on the system in times of low wind generation and high demand, which was seen on the 26th August. On this day prices averaged 6.61c/kWh, wind generation was 50% (587 MW) lower than the monthly average and offline capacity was significant at 2.1GW.