Falling gas prices offer prospect of lower bills for business

Electricity prices rise in July as wind fails to deliver

Irish wind farms have the capacity to generate 3,736 megawatts of electricity, the equivalent of nine average-sized power plants. Photograph: David Sleator

Irish wind farms have the capacity to generate 3,736 megawatts of electricity, the equivalent of nine average-sized power plants. Photograph: David Sleator

 

Businesses energy bills are poised to fall this winter on the back of declining natural gas prices, figures released by one supplier show.

According to independent energy supplier Vayu, natural gas prices have fallen since February with charges for July 18 per cent lower than the average for the year to date.

The price of wholesale gas for October 2017 to March 2018 is 7 per cent cheaper than for the same period last winter.

Wholesale gas prices have a knock-on impact on the market as a whole as the fuel is used to generate electricity.

Vayu’s senior energy analyst, Keith Donnelly, said that gas users can expect their July bills to be up to 25 per cent cheaper than in the first quarter of the year.

“There is potential to continue the good news story into winter 2017,” he added. “Prices are trading close to yearly lows and are 7 per cent cheaper than last year’s out-turn.

“If you look at your base requirements in conjunction with the current strength of the euro, there may not be a better time to look at your future needs.”

Unpredictable market

However, Mr Donnelly warned a number of factors rendered the market unpredictable, including the closure of a large storage facility off the British coast and low stocks in the Netherlands.

He pointed out the market could get uneasy if supply shortages were sustained.

“In our view, taking a longer-term view on energy requirements would be the sensible thing to do,” Mr Donnelly said.

The company’s figures also show electricity prices rose 10 per cent in July as the amount of wind-generated power on the system fell sharply during the month.

Average wholesale prices through the month were 4.08 cent a kilowatt hour (the unit in which electricity is measured), which was 7 per cent more than in July 2016 and 10 per cent more than in June.

Irish wind farms have the capacity to generate 3,736 megawatts of electricity, the equivalent of nine average-sized power plants. Wind accounted for about 15 per cent of all electricity generated throughout Ireland this month, hitting a peak of 2,487 on July 15th, which was about 62 per cent of total demand at that time.