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Tuesday 23 September 2014

Cold snap set to spark rise in price of electricity and gas

Charlie Weston Personal Finance Editor

Published 27/03/2013 | 05:00

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The cold weather will lead to a rise in energy prices

THE cold snap is set to send energy bills higher, experts are warning.

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Freezing weather is set to last well into next week, with the conditions putting pressure on energy supplies.

Sub-zero temperatures have sent reserves of gas to record lows in the UK, and development specialists said is likely to impact on gas and electricity prices here.

Around 630,000 homes use gas for heating and cooking, while 65pc of electricity is generated from the burning of gas and coal.

Now consumer groups are warning that electricity and gas suppliers will pass on the higher costs they are experiencing to householders.

Energy expert with price comparison site Bonkers, Simon Moynihan, said suppliers would seek to hit householders.

"The shortage of gas in the UK now means prices for Irish consumers could go up in the next few months," he said.

He added that vast amounts of the gas used here for generating electricity and supplying homes is imported from Britain.

Eoin Clarke of uSwitch, the switching service, said gas prices in the UK had risen by half recently.

"Increases in wholesale fuel costs have a knock-on effect for Irish households.

"As the wholesale cost of electricity and gas usually makes up about half of energy bills, households could be forced to cope with further gas and electricity prices if the situation persists," he said.

Householders have been hit by massive hikes in energy prices in the past two years.

The annual cost of electricity for the average home has shot up from €961 in the winter of 2011 to €1,119 now, Mr Moynihan said.

Switch

And the cost of gas for a year for a home now averages €990, up from €727 two years ago.

The combined rises work out at €423 higher, or a rise of 25pc in the cost of heating, cooking and lighting a home.

Energy expert with Bord Gais John Heffernan said there was no immediate threat to consumer prices, but he stressed that the shortage of wholesale gas suppliers was a concern.

Consumers have been encouraged to switch suppliers to ensure they get the best value.

Savings of €254 a year are possible by moving from one supplier to another, Mr Clarke said.

But despite potential savings, only one in three households switched electricity supplier last year, research by uSwitch has revealed. People were reluctant to move from one supplier to another for gas and electricity because they lack information and were unable to tell if the new deal would be cheaper, he added.

"This means that many could be paying more on their bills than they need to be," Mr Clarke said.

Irish Independent

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