Why are gas and electricity prices in Ireland increasing?
It’s been a bad summer for Irish energy
customers with news that gas & electricity prices are going to increase over the coming weeks.
In this short video, we’ll explain some of the reasons behind the increases
and what you can do to offset them. A main reason behind the
increase is that Ireland imports a huge amount of its energy such as gas and oil
from abroad. This means we’re highly susceptible to increases in the price of energy
on wholesale international markets. Over the past year, the price of gas has increased by over 30% on international markets. The increases may be due to higher global demand but recent work by Norway, a major gas producer, on their gas pipeline infrastructure has disrupted supply and put pressure on gas prices too. The second reason is that Ireland also
relies heavily on fossil fuels to generate our electricity, most of which are imported and are prone to fluctuations in price. Ireland has the 6th highest
dependency on imported fossil fuels like coal and gas for electricity generation
in the EU with the majority of this dependency being on natural gas – in other words,
we import and burn a huge amount of natural gas to make our electricity, so an increase in the price of gas will often lead to an increase in the price of electricity. And as we’ve already seen, the price of gas
has gone up by over 30% recently. Oil is another fossil fuel that we import and use
in our electricity generation Although prone to fluctuations, the price has increased by around 20% so far this year largely due to increased global demands and restrictions on output from oil-producing countries, aimed at reducing supply
and boosting price. So, what about renewable energy?
Being a small island on the edge of the Atlantic, Ireland has huge potential to leverage
the power of wind and wave energy and, by producing more home-produced
renewable energy, would be less at the mercy of the international oil
and gas markets. Unfortunately Ireland’s level of renewable energy output, although
increasing, still falls short of what’s required. Also, renewable energy is more expensive to produce than energy from burning fossil fuels. This is one of the reasons why the Public Service
Obligation (PSO) Levy was introduced in 2001, whose main function is to generate money to support and subsidise the sector. However, since the PSO levy was
introduced, it has steadily been increased and now costs customers over €100 euro a year. So, while renewable energy is a longer-term solution to rising energy costs – and of course global warming – in the short-term it’s costing us in the form of higher bills – a lose/lose
for now it would seem. So, what can be done to beat rising gas & electricity prices? Well, firstly customers should always look at ways that they can reduce their
energy consumption, whether that’s installing energy-saving lightbulbs or
remembering to unplug appliances at night There are lots of little things that we can do
to use less energy around the home Secondly, customers should look
at switching energy supplier each year. Energy suppliers usually save their best
rates for brand new customers which are heavily discounted compared to the
standard rates a longer-term customer is charged. So, by switching over to a new
supplier every year, you can save big on your energy bills. Around 27,000 people
switch electricity supplier and 11,000 switch gas supplier every month –
so why not join them? It’s quick and easy, and usually
only takes a few minutes online. So, hopefully that sheds some light on a few of the reasons why energy prices are increasing. For more information, head over to our blog and if you have any questions contact us on social media. or comment below.
Thanks for watching!