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Energy cost increases that were 'unnoticed' in warm months could bring 'big shock' in winter

The price of electricity, gas and fuel in Ireland have increased by 19.6% in the last year.

Image: Shutterstock/yelantsevv

A RISE IN the cost of electricity bills may have stayed below households’ radars during the warmer months, but could bring a “big shock” in winter, consumers are being warned.

The prices of electricity, gas and fuel in Ireland have increased by 19.6% in the last year, according to the CSO’s Consumer Price Index.

Grid operators Eirgrid and SONI, which operate in the Republic and Northern Ireland respectively, issued two separate amber alerts earlier this month due to temporary electricity supply shortfalls.

  • Our colleagues at Noteworthy want to investigate why we are facing an Irish electricity crisis. Support this project here.

Rising energy costs around Europe, coupled with pressure on supply, have pushed up electricity prices.

But less use of energy during the summer could mean that some households are not yet aware of the increase, which could hit hard in the colder months.

Daragh Cassidy, spokesperson for price comparison website Bonkers, told The Journal that “because the weather has been quite good in summer, people aren’t really thinking about their gas and electricity bills”.

“I think when it comes to December, January and February when people start getting the winter bills, it’ll be a really big shock.”

He attributed the rising bills to an increase in the price of gas internationally, a dip in wind energy output, and the impact of Covid-19.

“The price of gas has skyrocketed on international markets. Over the past four or five months, we’ve seen the price of gas go up by 200%, so it’s a huge increase and that is putting upward pressure on prices,” Cassidy said.

“We still generate a lot of our electricity from burning gas and, to a lesser extent, coal. When the price of gas goes up, it affects the price of electricity as well,” he said.

“There’s been a lack of wind output in recent months. According to the world climate service, for example, June and July of this year was one of the least windy periods on record. That means there’s been a lack of renewable energy on the system.

“That coupled with very expensive gas and coal prices hasn’t helped things as well because when renewable energy dips, we may need to rely on gas and fossil to generate more of our energy.

“Covid hasn’t helped things. It caused a lot of bottlenecks in markets worldwide.

“Two big gas-fired power plants have been out of action for the past year or so, one at Whitegate in Cork and the other at Huntsgate in Dublin. Those usually generate around 15% of our electricity. That means that less electricity is being supplied to the grid than there usually would be.”

Minister Eamon Ryan said last week that the plants have been out of commission over the last year for maintenance, but that they are expected to come back in the next two months.

In October, Energia is set to raise electricity prices by 15.7%, which it said would be an increase of around €4.28 per week for an average customer. Gas bills will increase by 18.5% (around €3.59 per week) and dual fuel bills by 16.9% (€7.88 per week).

The company said the increases are “unavoidable as a result of global energy market conditions”.

How to reduce bills?

Cassidy said that households can try to reduce their bills by using less energy and changing their provider.

“Installing energy saving lightbulbs, switching off appliances at night, not overfilling the kettle… I’d encourage readers to research and put a little time and effort into how you can use less energy around the home, because it can all add up,” he said.

“The way the energy market works is that all the suppliers offer discounts to attract new customers. The same way you switch broadband or mobile provider, the energy market is no different.

“The suppliers offer discounts of around 30-40% for the first year to people who switch. You could save around €500 a year on your bills.

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“With prices increasing, that discount is going to be off a higher price, but it’s still a discount.”

Consumers can also check if they qualify for the fuel allowance or the household benefits package.  

The fuel allowance is paid under the National Fuel Scheme for 28 weeks during winter for people who depend on long-term social welfare payment and wouldn’t be able to heat their homes otherwise.

The household benefits package helps with the cost of electricity and gas bills for people over the age of 70 or who receive certain pensions or other allowances.

Speaking to The Journal in New York yesterday, Taoiseach Micheál Martin said that the government is concerned about the rise in energy prices, which he attributed to inflation.

He said that in Budget 2022, which is set to be published next month, it will “seek to protect the lowest income groups and those most impacted by increasing fuel prices”.

About the author:

Lauren Boland

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