Soaring electricity costs push energy index up

A combination of rising Irish wholesale electricity and coal prices offset decreasing oil and wholesale natural gas prices saw the Bord Gais Energy Index climb by 1 per cent in January.The index is currently 147, 2 per cent lower than in January 2013.

John Heffernan, gas & power trader at Bord Gáis Energy said that January was a month of " contrasting fortunes" for fuel prices with no one theme dominating price moves.

“The primary driver for the month-on-month increase was the reduced availability of cheap and efficient power plants due to maintenance, which resulted in a substantial increase in wholesale electricity prices. Above normal seasonal temperatures and growth concerns with emerging economies drove the UK natural gas and the Brent crude oil price lower,” he said adding that it is expected that oil prices in 2014 will be influenced by whether the potential supply growth from Iran, Libya and North American shale oil materialises.

“If so this will put some downward pressure on prices rather than simply limiting rising prices as it has done in 2013.”

Irish electricity prices jumped by 7 per cent in January, while European coal prices rose by 4 per cent due to supply concerns following a surprise export ban by the Colombian government on one of the country’s biggest exporter of coal due to breaches of environmental regulations.

Wholesale natural gas prices dropped by 5 per cent as the extended spell of unseasonably mild weather continued to erode UK demand amid ample gas supplies. The Brent Crude Oil price was 2 per cent lower due to concerns about emerging market economies.