Energy bills to fall in coming months, industry figure predicts

Energy bills are likely to fall in coming months as gas prices ease on world markets, a leading industry figure predicted on Tuesday.

Wind power halved Irish wholesale electricity prices to €193 a mega watt hour (MW/h), the unit in which it is traded, from €320, on some days in December, according Noel Cunniffe, chief executive of lobby group, Wind Energy Ireland.

Speaking after addressing the organisation’s conference in Dublin on Tuesday, Mr Cunniffe said it was likely that families would see energy bills falling later this year as easing gas prices fed through to domestic charges.

Soaring energy prices had left 266,000 homes and businesses in arrears on their electricity bills at the end of last year, while 146,000 fell behind on their gas payments.

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“International gas prices are in decline, we should see a decline in our energy bills in coming months,” Mr Cunniffe said.

Falls in gas and wholesale electricity prices take time to feed through to bills, because suppliers buy the energy they provide to households several months in advance, Mr Cunniffe noted.

He pointed out that a growing amount of renewable power in Ireland and European was helping to ease gas demand and cut prices for the fuel, used to generate around half of Irish electricity.

[ Wind farms produced 41% of Irish electricity in January ]

“The more wind and solar we get on our system, and if we continue to push that on to the market, the more we will see that wholesale price come down,” Mr Cunniffe said.

Irish wholesale electricity prices are linked to natural gas costs. But when they are available, wind and other renewables help push down prices, as they squeeze more expensive generators out of the market, cutting the overall price.

Mr Cunniffe argued that more renewable power there was on the Irish system, the less we would depend on fossil fuels.

“The quicker we get there, the quicker we should be able to control our own energy prices,” he added.

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In December, Irish wholesale prices averaged €193.42MW/h on the windiest days, but hit €320.16 on days when renewable power was least available.

Most wind farms in the Republic are guaranteed prices of between €72 and €75 a MW/h for the electricity they generate.

Overall, wind supplied 34 per cent of Irish electricity in 2022. Mr Cunniffe told the conference that this was a record and meant that the industry supplied the country’s power one in every three days last year.

Mr Cunniffe warned that both An Bord Pleanála and the new Marine Area Regulatory Authority (MARA) should get the resources they needed to ensure efficient scrutiny of onshore and offshore wind energy projects.

Planning and national grid access remained the two risks that developers listed for their projects, he told the conference.

Earlier, Malcolm Noonan, Minister of State for Heritage and Electoral Reform, confirmed that MARA, created by legislation passed last year, would be established next month.

[ Europe’s wind industry flags further weakness in 2023 despite energy demand ]

Mr Noonan told the conference that offshore wind farms would be subject to environmental impact assessments and other planning conditions.

“Although this will add complexity, I am sure we can all agree that they are necessary,” he said.

The Marine Area Planning Act, 2021, which overhauled the Republic’s 90-year-old foreshore licensing regime, created the new regulator.

Government has already given several offshore wind developers marine area consents needed to begin planning work on individual wind farms.