Wholesale gas and electricity prices in Northern Ireland decreased by 30% and 10% respectively compared to the same period last year, according to the latest Naturgy Energy Review and Forecast. The report shows that wholesale gas prices fell by 10% on a month-by-month basis while electricity prices registered a slight increase of 0.5%.
April to date tracked similar losses to previous months for gas, with prompt prices down 10% month on month, averaging at 35.5 p/therm. There has been a significant decline in these prices since October 2018, by 46% on average.
Commenting on the review, Naturgy Energy Analyst, Lauren Stewart, said: “Overall the system remained well supplied, as significant volumes of LNG cargoes continued to meet demand. Seventeen tankers docked at UK terminals so far this month, eight more than April 2018. Additionally, feeding into an oversupplied system were factors such as mild weather conditions reducing demand and annual maintenance on the British-Belgian Interconnector limiting Britain’s export capabilities.
Q3 2019 is expected to remain bearish, as preparations are being made for the BBL pipeline to become bi-directional in July. This should help improve trading between Britain and Europe and dampen volatility to gas prices especially now that there is reduced storage capacity due to the closure of Rough. The NBP gas market has collapsed due to insufficient storage capacity and an oversupplied system. The BBL (Balgzand Bacton Line) pipeline becoming bi-directional will allow surplus gas to meet capacity needs elsewhere.”
April to date witnessed year on year losses to electricity prices of 13%, but gains seen from the previous month were mainly due to the intermittency of wind generation on the system. With renewables accounting for 33% of the fuel mix, wind generation to the system has averaged 1,377 MW, down 11% from the previous month.
The effects of offline capacity and low wind generation was felt on the 11th April with prices hitting a two month high at 6.41 p/kWh. On this day wind generation was 74% below the average for the month.
Ms Stewart added: “Electricity prices averaged at 4.25 p/kWh down 13% from the previous year. Prices softened in the latter half of April due to below seasonal demand, spikes in wind output at various stages in the month and continued losses in gas prices. Offline capacity has also dwindled in April falling from 1,400 MW to 800 MW of previously offline power generators.
“In other news, Eirgrid began the process to shortlist three potential landfall locations off the coast of Cork to establish the French-Irish Celtic Interconnector, a strategic move to ensure long term security of power supply for the island of Ireland. If approved, this could be completed by 2026.”
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