Wholesale gas prices fall 23% over year

Wholesale gas prices are 23 per cent lower than this time last year, according to a new energy report by the utility Vayu, while wholesale electricity prices are down 7 per cent year-on-year.

The monthly Wholesale Market Report compiled by Irish energy supplier Vayu found wholesale gas prices for October were up 4 per cent compared to last month on foot of a seasonal rise in demand and a number of unplanned outages at gas terminals. However, gas prices are still down 23 per cent compared to this time last year.

It said European gas demand was down 13 per cent since the beginning of the year as a result of warmer weather. This, combined with increased supply, has resulted in substantially increased gas inventories.

Vayu senior energy analyst Joanne Daly said the gas market has been choppy this month due to fluctuating demand and numerous unplanned outages.

“The market is keeping a close eye on the prospect of Ukraine and Russia normalising their gas trade relationship. Any agreement during talks over the coming days would greatly reduce the risk premium currently factored into gas prices.”

Gas supplier

She said that Russia, as Europe’s biggest gas supplier, provides a quarter of continental gas demand, with a third coming via Ukraine.

The average wholesale price of electricity in the Irish market so far in October is up 3 per cent from the average in September and down 7 per cent compared to October 2013. The report said the month-on-month rise in electricity prices was largely a result of lower than usual wind generation and a rise in the price of gas, which is the main fuel used to generate electricity in Ireland.