Wholesale gas prices plunge 36% over year

The figures come from this month’s Business Energy Report by Vayu Energy which describes prices dropping 14% month on month due to on-going healthy supply and decreased demand year on year.

To date in September, the report says the average day-ahead price for gas, the contract for gas delivery tomorrow, was 26.28 p/therm, compared with an average price of 41.10 p/therm 12 months ago.

It adds that wholesale prices are a full 49% lower compared with the average monthly price recorded for the month of September over the previous three years (2013-2015) with a significant impact for lowering the energy costs of many Northern Irish businesses.

“Temperatures are expected to be above normal in the UK and throughout most of Europe during the last week of September,” said Joanne Daly, senior energy analyst at Vayu.

“Weather forecasts are also signalling strong winds for the same period. These point to a period of continued low gas demand for the remainder of the month, which could keep a cap on any potential gains due to supply issues.”

Adding that storage levels across Europe were at 86% capacity, she said the trend would continue until the return of heating demand.

“Although withdrawals traditionally begin in early October, if the weather remains as mild as it has been recently, these withdrawals may not be necessary until later in the winter period, which may also be easing any concerns surrounding security of supply.”

On electrcity and wind energy, Ms Daly said wholesale day-time electricity prices had averaged 35.71 £/MWh in September, down 5% month on month.

She said night-time prices had averaged 18.65 £/MWh over the same period. Compared to the same period last year, average day-time prices are down 11%, attributed mainly to lower prices for gas year on year, which is the main energy source used to generate electricity in Northern Ireland.

Total wind generation capacity on an all-Ireland basis currently stands at 3,169MW. Wind energy accounted for 21% of overall electricity generation so far in September, reaching a peak of 2,562MW on the ninth with potential to meet 56% of total electricity demand on the island of Ireland at that time.