Irish Electricity & Gas prices compared to Europe
SEAI published a good report late last week on Irish energy prices.
There are some issues with the report
- It divides information into bands which don’t naturally match up with the way Irish prices are set. For example, Irish pricing bands tend to be loosely set according to MIC (max import capacity levels, KVA levels). The reports comparison seem to be based on consumption thresholds.
- It uses 2017 data and Irish prices have climbed much higher since then largely due to gas storage levels been depleted last winter which are still being replenished. This summer has also seen low wind power levels on the grid due to the high pressure weather system putting more upward pressure on prices.
But taking the report at face value it suggests that:
- Average Irish business ELECTRICITY prices are about 11% higher than the European average. (About 7% higher than just the euro area countries).
- Average Irish business GAS prices are about 9% higher than the European average. (About 5% higher than just the euro area countries).
- Surprisingly at a retail household level we do better with ELECTRICITY prices in 2017 been just 1% above the EU average and 6.6% below the Euro Area. GAS prices In the second half of 2017 were reported to be 9.2% and 21.2% below the EU and Euro Area respectively.
New Smartgrid payments coming soon
Some of our clients already receive DSU payments. From around March-2019, DS3 system services payments will also be available. The payments can be up to €100k per MW of response available and therefore quite lucrative for businesses that qualify. We are also currently looking at CHP curtailment payments for clients with a suitable set up. Contact me for more information.
New Solar PV grant announced
SEAI have announced a new grant of up to €3,800 to support the installation of Solar PV panels and battery energy storage system for homeowners.
Why has this summer been so hot?
If you recall earlier in the year I wrote in one of my newsletters – ‘Why is the weather so cold’. Well it seems the Jet stream is implicated again. The jet stream, a high-altitude band of air that pushes weather systems around at lower altitudes, has been weaker than normal. It has also been positioned this summer unusually far to the north, particularly over Europe. This has kept the low-pressure systems that often drive wind and rain over northern Europe at bay hence the drought.
The stalling of the northern hemisphere jet stream is being increasingly firmly linked to global warming. According to Nasa, in 2016 the Earth’s surface temperature shattered the previous record for hottest year by 0.12°C. That record was set in 2015, which broke the previous record by 0.13°C. That record had been set in 2014, beating out 2010, which in turn had broken the previous record set in 2005.
The streak of three consecutive record hot years is unprecedented since measurements began in 1880. In the 35 years between 1945 and 1979, there were no record-breakers. In the 37 years since 1980, there have been 12. According to the United Nations IPCC’s latest report. almost 100 percent of the global warming over the past 60 years is human-caused. Unfortunately, there are a lot of un-informed views on climate change out there. The IPCC (Intergovernmental Panel on Climate Change) which thousands of scientists contribute to is the place to go for your information. The rest such as what we see in Dail Eireann is entertainment.
Electric cars continuing to surge ahead
Forbes is reporting that the new Telsa Model 3 is outselling other luxury cars winning 23% share of the small and midsize luxury car market in July, ahead of BMW’s 17% and Mercedes’ 17%. The closest individual model to Tesla’s mass-market endeavor is the Mercedes C-Class and even then, its July sales are estimated at just 6,029 units compared to Telsa’s 16.000. Closer to home the SEAI is offering grants between €2,000 -€5,000. with additional incentives on VRT & motor tax.
World energy outlook
Oil could be back to US$45 a barrel within 12 months, Citigroup’s commodities chief Ed Morse said in an interview with the Financial Post, noting that the bullish case for crude is based on a faulty analysis.In the immediate term, however, Morse agrees oil will continue strong. It can’t really be any other way: the supply disruption potential in Libya and Venezuela, the Iran sanctions, and the U.S.-China trade war are all arguments for the bullish case for oil and they will remain on the scene in the next few months.
Aside from oil forward UK gas prices are holding stubbornly high. As a result fixed gas & electricity contracts for those who want to fix their contracts for the year going forward look v expensive. And remember I-SEM is still scheduled to completely move the goalposts in Oct.
Irish Wholesale electricity prices
Irish SMP electricity prices for July where 6.12c/kwh more or less unchanged from last month. You can see from the graph below how this compares with the last two year’s – ie considerably higher. The high gas prices and lower wind levels this year are the drivers behind these high prices. The high pressure weather effect has meant that lately only about 10% of electricity on the grid has come from wind whereas normally it is in the region of 26-28% for Ireland.
Even nuclear power has been effected by the weather with talk that the French have to turn things down due to lower water river levels which are needed for Nuclear power station cooling.