Irish Wholesale Energy Prices
Irish wholesale energy prices have recorded significant month-on-month increases. The Naturgy Energy Review and Forecast for July 2019 shows Irish wholesale gas registered an unseasonal increase of 6% on average compared to the previous month; with electricity prices 14% higher compared to the same time period.
The review notes the increase in wholesale gas prices was largely due to above seasonal demand coupled with a raft of unplanned outages and low LNG send out. Meanwhile, low wind generation impacted wholesale electricity prices with other fuels, such as gas and oil, dominating the fuel mix. Renewable sources accounted for 24% of the fuel mix for July compared to 26% in the previous month.
Commenting on the review, Naturgy Energy Analyst, Lauren Stewart, said: “While wholesale gas and electricity prices are down 49% and 15% year on year respectively, July proved volatility can still be a risk even during the summer months. The outlook for the wholesale gas market is bearish with greater LNG imports from the US due to start later in the summer expected to offset any limitations that may occur. Above seasonal temperatures and a bearish wholesale gas market should bring stability to wholesale electricity prices but another spike in carbon prices could trigger some volatility”, added Ms Stewart.
Gas Market Prices
Prompt prices were considerably more volatile during July than in June, with Day-Ahead trading within a 9.5p range throughout the month. There was a general sense that the NBP was fundamentally bearish which was realised before the end of the month with the Day-Ahead contract dropping back below the 30p/th mark.
Electricity and Wind Energy Update
Volatility during July resulted in wholesale electricity prices reaching a three month high of 7.29 c/kWh which can be largely attributed to low wind generation. The strong correlation between wind generation and wholesale electricity prices was highlighted in July as wind on the system increased 108% week on week, triggering a 10% week on week drop in prices.
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