High winds & mild weather pushes energy index lower in February

Monday 10 March 2014 08.42
Wind turbines met 23% of Irish electricity demand last month
Wind turbines met 23% of Irish electricity demand last month

Just over a fifth of Ireland's electricity demand was provided by wind in February, which contributed to a 5% reduction in energy prices in the month.

The latest Bord Gáis Energy index stood at 140 in February, which is 7% lower than February 2013.

A fall in wholesale gas prices also contributed to the fall last month. UK gas stocks are described as "robust" following the mild winter and it is likely that an overcapacity resulted in reduced energy prices.

While protests in Kiev failed to have an effect on wholesale gas prices in February, the international crisis resulted in a short term spike in early March.

Bord Gáis warned that any further escalation or de-escalation of the Ukrainian crisis is likely to influence wholesale energy prices over the coming weeks. But it added that there is currently no evidence of any reduction in Russian gas flows to Western Europe.

The oil element of the index was unchanged last month as Brent crude prices were unchanged in euro terms, as the euro's gain against the dollar protected euro zone oil buyers. But geopolitical risks - especially in Libya, Syria and Venezuela - remain a concern and there is now about 3 million barrels of oil per day still offline.

The natural gas element of the index fell by 10% as high wind generation, uninterrupted Norwegian gas supplies, robust stocks and reduced demand pushed wholesale gas prices lower. 

Bord Gáis said that the coal element of its index eased by 9% due to the unseasonably high stock levels, a lack of demand in Eastern Europe and falling demand as spring arrives.

The electricity element of the index slumped by 13% as wind turbines met 23% of Irish electricity demand last month - the second highest percentage on record. The all time record high seen in December 2013 with a level of 24%. This helped to reduce gas fired generation which feed through to wholesale prices.