Electric Ireland has blamed the company’s latest price hikes “on ongoing volatility in the wholesale energy market”, claiming the cost of supplying electricity and gas to customers in the Republic has risen by 700 per cent in past 12 months and by 200 per cent since June.
The State’s largest energy retailer also said it expected the price volatility to continue over the coming months given the uncertainty in the geopolitical situation and international energy markets.
The company said on Thursday it was raising its standard household electricity and gas prices by 26.7 per cent and 37.5 per cent respectively from October 1st in response to the recent increase in wholesale prices.
It was the fourth price increase announcement from an energy supplier here in less than a week following hikes by SSE Airtricity, Community Power and PrepayPower, intensifying the energy price squeeze on households.
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The move will hit around 1.1 million electricity customers and 175,000 gas customers. Electric Ireland said the increases equate to €37.20 per month on the average residential electricity bill and €42.99 per month on the average residential gas bill. This would add around €446 a year to the average customer’s electricity bill and €516 to their gas bill.
While wholesale gas prices have come down in recent days in anticipation of EU plans to reduce energy usage and avert a winter energy crisis, companies here have already baked recent increases into their pricing schedules. Electric Ireland said it would continue to keep prices under constant review.
“The wholesale market is very volatile at present and changing daily. While it is up substantially since last year, to the extent that market prices fall and associated hedge cost fall, we will endeavour to pass on reduction to our customers,” a spokeswoman said.
The EU is expected to recommend cuts to power demand and a cap on the price of electricity generated by anything other than gas in an effort to ease the impact of higher gas prices. The electricity demand cut is based on a plan agreed in July by EU energy ministers.
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Electric Ireland’s latest price hike was the company’s third this year. In May, it raised electricity and gas prices by 23 and 25 per cent respectively in response to the acceleration in wholesale prices, which has been compounded by war in Ukraine. This was followed by increases of 10 and 30 per cent in August. These came on the back of two price increases last year.
“This continues to be a very challenging time for customers, and an unprecedented time in the energy industry with increases to wholesale gas prices in excess of 700 per cent over the last 12 months and 200 per cent since June 2022 alone,” Pat Fenlon, executive director of Electric Ireland, said.
‘It is with considerable reluctance that we are increasing electricity and gas prices again for our customers, which is necessary given the continuing increases in wholesale energy prices, particularly gas. To put that into context, this time last year wholesale gas prices for winter were circa £1.15 per therm, and as of last week, this winter’s prices were circa £7.70 per therm,” he said.
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When all increases are taken into account households are looking at paying over €1,000 extra for their electricity each year and over €1,100 more for their gas, Daragh Cassidy, head of communications at price comparison website Bonkers.ie, said.
“To say these are unprecedented times is an understatement. Price increases of this frequency and this magnitude are clearly unsustainable,” he said. “During the last energy crisis in the 1970s, the price of oil increased by around 400 per cent on wholesale markets. We now have gas up by over 1,000 per cent. That shows you the scale of the crisis we’re looking at.”
“We’re heading into winter with gas and electricity prices at absolutely astronomical levels. And it could get even worse. The average gas and electricity bill is now around €4,000. That’s close to the UK price cap of £3,549,” he said.
“In the UK the price cap is forecast to rise to over €6,000 in January. Over 70 per cent of our gas comes via the UK so our prices track theirs relatively closely (indeed UK gas and electricity has generally been slightly cheaper than Ireland’s in recent years). So that shows you what we could be looking at,” Mr Cassidy added.
A recent report by the Economic and Social Research Institute warned that in a worst-case scenario up to 70 per cent of households in the Republic could be plunged into energy poverty if the current spate of price increases continue.