What are the major causes of this year’s dramatic rise in Irish and European energy prices, and why are some commentators worried about a winter crisis?
There is no single underlying issue that can be blamed for the situation.
If you had to simplify it, you could say that a mismatch between supply and excessive demand has pushed energy costs upward across the continent, with benchmark European gas prices, in instance, tripling this year even before winter arrived.
Rising wholesale gas costs are putting energy suppliers out of business in a saturated market in the United Kingdom.
As winter approaches, Ireland, on the other hand, is dealing with its own set of problems.
So, what is going on, what is the government’s plan, and how will this affect consumers?
At the moment, gas provides more than half of Ireland’s electricity.
In the run-up to winter, this creates two urgent challenges: the first is the global price of natural gas, which is soaring.
As economies reopened and businesses ramped back up after the interruption of the previous 18 months or so, demand for gas and electricity soared this year.
Russia is sending less natural to Europe and sourcing alternatives has proven tricky, with US exports curbed by a series of storms and extreme weather events in the Gulf Coast over the past eight months.
Fuel and gas prices up by around 19.6% in the year to the end of August, the Central Statistics Office showed recently.
Another issue that has exacerbated the problems: the temporary closure of two crucially essential gas-fired electricity generating plants: Bord Gáis’ Whitegate in Cork and Energia’s Huntstown in Dublin.
The closures have been blamed for recent short-term electricity supply shortages, prompting the Single Electricity Market Operator to issue two consecutive amber alerts (SEMO).
Concerns have been expressed that such gaps could worsen in the coming months, resulting in blackouts and power outages as additional demands are made on the infrastructure.
Consumers are being asked to shop around this winter in order to save money on their electricity costs.
Installing energy-saving lightbulbs, turning off appliances at night, and not overfilling the kettle are all examples of ways to save energy. We advise readers to do a little research and invest some time and effort into finding ways to save energy around the house, because it all adds up.
The way the energy market works is that all the suppliers offer discounts to attract new customers. The same way you switch broadband or mobile provider, the energy market is no different.
People that switch get reductions of roughly 30-40% for the first year from the suppliers. Your bills could be reduced by roughly €500 per year.
With prices rising, the discount will be applied to a higher price, but it will still be a discount.
A renewable future
Ireland’s electricity generation will undergo a transformation in the next years as the country transitions to renewable energy sources.
According to a government goal, renewable energy sources should account for 70% of Ireland’s electricity consumption by 2030.
As a result, the electricity system will shift away from oil and peat-powered plants and toward renewable energy sources like wind and solar in the following decade.
A fantastic way safeguard your home’s energy bills from these price hikes is to install a renewable energy source. We are partial to solar energy systems, which are becoming a much more accessible option for many home buyers thanks to government funded grant schemes. And with an added battery, you can even save unused energy for later use, making your system that much more efficient.