Lack of natural gas storage raises concerns of higher winter energy prices
However a project to build an interconnector linking the French and Irish electricity systems was yesterday awarded a €4m grant
Average wholesale energy prices were 42pc higher year-on-year during the first six months of 2017, according to the Vayu mid-year energy report for June 2017.
The report comes as the energy company warned that Irish energy prices could rise further this winter due to the closure of Rough, a major natural gas storage site in the UK.
The site has closed due to concerns over safely and the difficulty in continuing to run the site.
“We are entering a winter without any gas in long range storage for the first time since Rough became operational over 30 years ago. The risk now is that the market becomes nervous and reacts to every change...causing prices to spike this winter and become more volatile,” Liam Faulkner, COO at Vayu, said.
Despite 60pc of Ireland’s gas coming from the Shell Corrib field, Ireland continues to import natural gas from the UK.
However, a project to to build an interconnector linking the French and Irish electricity systems was yesterday awarded a €4m grant from the European Commission. The interconnector will reduce Ireland’s reliance on the UK for its supply of energy.
When built, the interconnector will consist of around 600km of cables on the seabed between France and Ireland.
The cables will be able to transmit up to 700 MW of electricity, the equivalent of supplying power to around 450,000 homes.
Reflecting on current energy market conditions, Mr Faulkner said that there were three predominant issues affecting consumers; the over supply of liquid natural gas which was helping to moderate price increases, Brexit – and the uncertainty which it is brining to the market, and the closure Rough which will reduce storage capacity in the UK.
“Brexit negotiations will continue to add a level of uncertainty, looking forward to the remainder of the year, as we close out the summer, prices should remain fairly neutral over the next three months. However, looking to the last three months of the year, this is where the real uncertainty lies,” Mr Faulkner said.