Irish wholesale gas prices were 8% lower on average in September compared with September 2014 and 2% higher compared with last month, according to the latest Wholesale Energy Market Report published by Vayu Energy.
The report states that the year-on-year decrease in prices is due to an increase in pipeline gas supplies and a positive outlook for Q4.
A fall in the value of the euro against the pound sterling over the last twelve months masked an even greater drop in prices on the UK wholesale gas market, the source from which Ireland purchases its natural gas. Prices were down 14% in sterling terms year on year.
Irish wholesale gas prices are now 21% lower, compared with the average monthly price recorded for September over the previous three years.
This has had a significant impact on the energy costs of many Irish businesses purchasing gas on the wholesale market, particularly in the industrial and commercial segment.
Despite the robust supply levels, inventories in major European storage hubs are down significantly compared with last year. While injections into storage usually commence in April, this year most facilities waited until July before replenishing inventories when cheaper oil-indexed gas became available.
Gillian Lawler, senior energy analyst, Vayu, said: “While gas inventories are significantly down across European hubs, such as the UK and Germany, this is not proving to be a major cause for concern at the moment. We’re seeing a flexible supply picture in Europe with strong gas exports from Russia forecast for Q4, a surge in flows from Norway and a healthy LNG supply line from the Middle East. At the current time, it’s difficult to see a significant increase in price short of a weather-related boost in demand.”
Total wind generation capacity in Ireland now stands at 3,025MW. During September, wind energy accounted for 17% of overall electricity generation in Ireland. Wind generation during the month reached a peak of 1,702MW on September 12th when it accounted for 47% of demand at the time.