IN THE PAST few weeks millions of energy customers in Ireland have been informed of impending price hikes in the cost of their electricity and gas.
On Friday, Airtricity announced that it was to raise its electricity prices by 4.7 per cent and its gas prices by 8.5 per cent from 15 October, affecting its 370,000 electricity customers and 110,000 gas customers.
Before that, Bord Gáis Energy (BGE) announced a price rise of 8.5 per cent for its 400,000 gas customers from the beginning of October while just last week Electric Ireland said that its bills for its 1.3 million customers will also increase.
For Electric Ireland (better known to most of us by its old ESB name) customers’ electricity prices are to increase by 5.9 per cent while gas prices will rise by 8.5 per cent, also from 1 October. The move will affect the company’s 1.3 million electricity customers including 60,000 of whom also get their gas supply from the company.
In a time when consumers are already being squeezed by rising inflation and with another harsh Budget weeks away this was not the news they needed to hear.
So, who decides to put prices up?
The Commission for Energy Regulation (CER) in Ireland is responsible for regulating the gas and electricity sectors and effectively determining by how much utility companies can raise their prices.
Though it is Bord Gáis Energy that is the only supplier whose prices are actually subject to oversight from the regulator, it is more often than not the case that the other suppliers in the market adjust their prices in accordance with what it does, effectively meaning that the word of the regulator is key.
The CER states on its website: “We promote competition in the electricity and natural gas sectors so that customers can ultimately benefit from competitive pressures on prices and services.”
Typically when the regulator releases a statement confirming a price hike it will note about having to do so with regret and outline a number of reasons for the rise as well as encouraging consumers to shop around for the best price.
So what are the reasons for the price rises then?
Well one of the main reasons is that the regulator itself has increased charges for the use of the State’s electricity networks which the utility companies make use of and which distribute power to homes across the country.
The increased charges are to pay for the new electricity interconnector with Britain that you may have heard about. This interconnector is designed to link electricity supplies between Ireland and Britain by laying a 260 kilometre underground cable with a 500 megawatt capacity between Meath and Deeside in northern Wales.
The link will facilitate the import and export of energy between Ireland and Britain and is being built by EirGrid, the state-owned electricity company which runs the electricity network and which has budgeted that this will cost some €600 million.
On top of this, energy companies must also pay for an increase in the public service obligation charge which is added to all utility bills and which is used by the CER to buy peat generated electricity as well as pay for the the output of renewable forms of energy such as wind power.
Another factor is the weak value of euro against the sterling. Ireland imports most of its natural gas from Britain and so this is paid for in sterling. This graph shows how a euro has been worth less and less in sterling over the past year, increasing the amount which must be shelled out for imports:
One other factor aside from the currency issue is the rising price of gas on the wholesale market which can be caused by a number of factors, both economic and political, on the world stage.
As BGE’s power trader John Heffernan told us in June this can be anything from the EU trade sanctions on Iran – which can affect the vitally important Strait of Hormuz as Iran threatens to cut off access to it – to the economic growth of the world’s big economies like the US and China.
So the prices are going up but is there anything I can do to save money?
The short answer is of course yes.
The first thing you can do is shop around for the best deal as advised by the energy regulator. Not easy when they’re all putting up their prices but a good place to start might be a price comparison website like Bonkers.ie which is accredited by the CER.
But given the widespread price rices, it is obviously that no matter what you do you are still more than likely going to end up paying that bit more for your use of gas and electricity at home.
Human beings are creatures of habit but habits can be changed. Will changing habits impact significantly on how much it costs for your gas and electricity each month? Well, of course, that depends on how much your habits change.
If it’s a cold winter there’s not much you can do about that. You could reduce your heating costs by just lashing another jumper on. But you could also turn the heat down by a few degrees on your thermostat. For example, switching from 21 degrees celsius to 20 degrees can reduce your bill by as much as 10 per cent, say the experts.
You could also buy a radiator booster which works like a fan that you install on top of your radiator and pushes warn air through the room faster meaning you might not have to have your heating on as long as you intended.
You can buy these from the likes of Bord Gáis, which claims that for a running cost of around 60 cent you could save on average around €160 on your heating bill annually.
Another recommendation would be to not use a tumble dryer if you have one. But then if you have one you’re probably using it and it’s particularly handy if you’ve a big household and a lot of washing to get through. So, you could use dry cubes which, according to Purchase.ie, could reduce drying time by about 30 per cent, saving on electricity.
Another electricity saving measure is using energy-saving light bulbs which are increasingly popular and replacing the traditional light bulbs as we reported on in July. They last longer and use less electricity.
There’s also the simple energy-saving measure known as ‘turning-the-lights-and-appliances-off-when-you-leave-the-room-or-are-not-using-them’ which is by far the most effective way of saving energy and thus money. But it’s not always easy to remember, we’ll grant you that.
Now when it comes to heating water we all know about the immersion and while Des Bishop may take the mickey out of us (see below), we fret like no other nation for a damn good reason as often heated water does not get used but still costs money for the electricity expended.
One recommendation from the folk at Purchase.ie is to install an instant hot water tap or water-saving shower heads on your, er, taps and shower heads. Such products can be found here.
Now, watch this funny Des Bishop while we think of other ways to make you feel bad about your wasteful use of gas and electricity:
Now that was funny. So what else can I do?
There are practical things you can do in the kitchen like ensure that the coils in your refrigerator are cleaned and ensure that both the fridge and freezer are at the right temperature.
Generally these two appliances can be adjusted in winter as its colder anyway so be sure to adjust their settings in line with the time of year.
But ultimately it’s all about changing your habits, getting into the habit of shutting the doors of rooms to keep heat in, turning off all appliances when you leave the house or go to bed, turning the lights off in rooms your not using and of course, for god sake, turning off the immersion.
Have you any special energy-saving tips to share with us? Let us know in the comments section below