Energy prices rise by 1pc – with more hikes on the way
Energy prices in Ireland rose by 1pc in January, with rising wholesale electricity and coal prices offsetting falls in oil and gas costs, according to the Bord Gais Energy Index.
But the index could rise further this month after Bord Gais Energy announced just a couple of weeks ago that it's hitting its 150,000 consumers with a 2.2pc price hike for electricity. Airtricity raised its prices in November, while Electric Ireland also raised its charges last month.
However, any possible rise in the index could be offset by the recent entry of Energia to the residential energy market. It's vying to offer the best deals for combined electricity and gas services to families.
Reduced availability of relatively cheap and efficient power plants in January due to maintenance issues put upward pressure on wholesale electricity prices despite falling wholesale gas prices and near record volumes of electricity produced from wind turbines, according to the Bord Gais Energy Index.
"January was a month of contrasting fortunes for fuel prices with no one theme dominating price moves," said John Heffernan, a gas and power trader at Bord Gais Energy.
"Above normal seasonal temperatures and growth concerns with emerging economies drove the UK natural gas and Brent crude oil price lower," he said.
"It is expected that oil prices in 2014 will be influenced by whether the potential supply growth from Iran, Libya and North American shale oil materialises, and if so, this will put some downward pressure on prices rather than simply limiting rising prices as it has done in 2013."
He said that while extreme weather events "still pose a risk", the market is unlikely to see a repeat of escalating wholesale gas prices such as happened in March and April last year. Temperatures in Ireland and the UK remained unseasonably low during those months in 2013.