Long term power prices for Ireland are predicted to level out around the €100 per megawatt hour for the period from 2027 to 2030 rather than fall back towards pre-pandemic levels, a new analysis has found.
But Cornwall Insight has also said it cautiously optimistic that the worst of the energy crisis is over and it is unlikely that exceptional prices seen over the past two years will make a comeback.
The consultancy had previously forecast that prices would dip below the €100MW/h mark from 2026 onwards.
It thinks power prices will remain high for the rest of this year, due to the high cost of gas.
Gas prices have decreased over the last couple of months but remain elevated at early 2022 levels as Europe relies more on international LNG rather than cheaper Russian gas, it says.
The company thinks summer power prices here this year will average out just under €200MW/h with winter prices around the €130MW/h mark.
However, Cornwall Insight now expects prices to ease in the mid-2020s as low-cost renewable generators are built to meet climate targets.
This will take place in tandem with the closure of higher cost coal and oil-fired plans.
"The completion of the North-South interconnector linking Northern Ireland and the Republic of Ireland also improves network efficiencies," it says.
But it adds that prices will become relatively flat around €100MW/h from the late 2020s on, as demand growth is mainly met by low marginal cost generators and the completion of the Celtic and MaresConnect interconnectors allows the market to become a net exporter.
"While the outlook gives us reasons to be positive, the rise in our long-term forecast is still a worry," said Ruth Young, Senior Consultant at Cornwall Insight.
"The electrification of the economy in Ireland was always going to raise demand and with it prices."
"However, since our previous forecasts, concerns regarding lower energy capacity on the continent have increased. Due to a rise in export requirements and limited import capabilities, prices are expected to remain significantly higher than pre-pandemic levels."
