Energy prices to stay low as gas and electricity costs drop
energy costs are expected to stay low for businesses in the New Year as fresh figures reveal the cost of wholesale electricity and gas fell sharply throughout 2015.
The average wholesale price of electricity dropped by 9.4pc during 2015 while average wholesale gas prices dropped by 4.7pc compared with 2014.
That is according to the 2015 Wholesale Energy Market Report published by Vayu Energy from Vayu, the Irish gas and electricity supplier backed by global mining giant Glencore.
The company's latest report also indicates just over 23pc of the State's total electricity demand during the year was generated by wind.
The drop in the wholesale price of gas in the Irish market, which now stands at 1.64c/kWh (cents per kilowatt hour), was attributed to surging gas supplies and to the low price of oil.
Many contracts for gas are benchmarked against oil prices, which plunged to lows not seen since before the financial crisis during the year.
Vayu also said Ireland's security of energy supply will be "greatly enhanced" when the Corrib gas field, off the coast of Co Mayo, begins supplying the Irish network. The field is expected to commence supplying the network in early 2016. It was announced yesterday that the Government has granted final approval to Shell to begin operating the Corrib pipeline.
The project is expected to provide 42pc of the all-island gas demand over its first two years of operation.
Wholesale gas prices are now 18pc lower compared with the average price recorded over the period of 2012-2014. Senior energy analyst at Vayu Gillian Lawler said it is likely that prices will stay low in the New Year.
Despite the recent storms, temperatures have seldom dipped near zero this winter. "The weather has been much milder than normal and Norway is sending out gas at huge levels, [so] demand is lower and supply is abundant," she said.
"The price of oil though is what is really pushing it down and in the first quarter of next year we would expect that to continue."
The drop in gas prices has also meant a reduction in the wholesale cost of electricity, as gas is the main energy source used to generate electricity.
Wholesale electricity prices in the Irish market dropped by 9.4pc to 5.12c/kWh from the average price recorded in 2014. This is in addition to a drop of 14pc in 2014 compared with 2013.
Ms Lawler said that due to the reduced cost of wholesale energy, many large businesses could realise savings of "anything from 2pc to 11pc this year" depending on their level of spending.