Wholesale gas prices here are more than a third (35%) lower than they were this time last year, driven by a strong supply and decreasing demand.
The Vayu Wholesale Energy Market Report for August also shows gas prices – the main energy source used to generate electricity in Ireland – are 10% lower month-on-month, with seasonal factors impacting the price.
The average day-ahead price for gas is 1.25c/kWh so far for August, compared with 1.90c/kWh in August of last year.
Senior Energy Analyst at Vayu Gillian Lawler said there may be a further downside to winter prices as sterling continues to fall against the euro.
She said: “Updated storage figures show European stocks are extremely healthy. In addition, the recent update from Centrica that its Rough storage facility, which houses 70% of the UK’s storage capacity, will have 20 wells available for withdrawals from 1 November is also good news.
“This accounts for two thirds of wells at the facility, a significant improvement to earlier expectations of just four wells being available to year end.”
Meanwhile, Vayu said LNG (liquefied natural gas) deliveries have disappointed as producers have engaged in competitive tactics to bolster global prices – diverting cargoes from Europe to keep prices elevated to avoid the LNG market crashing.
However, the deliveries into Europe are still up 20% year-on-year.
The price of electricity in the Irish market has also fallen considerably since August 2015, with a 27% drop to an average price of 3.6c/kWh.
Lower gas prices have had a significant impact on electricity prices.
The Vayu index also shows that total wind generation capacity in the island of Ireland now stands at 3083MW.
Wind energy accounted for 24% of overall generation in August, having the potential to meet over 52% of total electricity demand on the island of Ireland at that time.
18,917 gigawatt (GW) of wind energy has been generated since the start of the year, representing 21% of total electricity demand on the island of Ireland during this period.
