Irish Wholesale Electricity Prices Fall as Gas Costs Slide on European Markets

Ireland’s wholesale electricity prices are continuing to drop, thanks to a combination of factors including increased renewable generation capacity and a drop in demand due to Covid-19. The trend has been ongoing for several months and shows no sign of slowing down, with prices hitting their lowest point in more than a decade. While this may be good news for consumers, it is causing significant challenges for the energy industry, which is grappling with oversupply and falling revenue. In this article, we explore the reasons behind the falling prices, the impact on the energy sector, and what the future may hold for the Irish electricity market.


According to industry experts, wholesale electricity prices in Ireland declined last month due to the decreasing cost of gas on European markets. The prices of natural gas, which determine Irish electricity costs, have been dropping in recent weeks as the winter heating season ends and supply continues. This has resulted in gas trading at €42-€43 for sufficient fuel to generate one megawatt hour of electricity. In February, Irish wholesale electricity prices were estimated to have averaged about 24 or 26 cents per kilowatt hour, close to its cost in February. This is compared to an estimated range of approximately 28-31 cents in January, which was a decline from the previous month when demand tends to peak. Wholesale electricity prices fluctuate depending on demand but set the framework for forward-buying contracts. Most analysts anticipate that natural gas prices in Europe will continue to decline in the coming weeks, leading to a further reduction in Irish wholesale electricity prices. The fuel is used to generate about half the power that Irish people require. However, leading electricity suppliers in Ireland have yet to announce if they will cut their prices in line with the declining wholesale costs. Due to forward buying or “hedging,” any cuts in electricity charges are expected to lag behind fluctuations in wholesale markets.


Overall, the continuous decline of Irish wholesale electricity prices can have both positive and negative impacts on the energy market. While the reduction may lead to lower electricity bills for consumers, it can also negatively affect the profitability of energy companies. As the demand for renewable energy grows and Ireland works towards achieving its goal of becoming a carbon-neutral economy by 2050, the energy market will undoubtedly see more fluctuations in wholesale electricity prices. However, it is important to keep a close eye on these trends to ensure sustainable and affordable energy for all.