When it comes to Energy and the energy market, we are living in very interesting times. Any business owner putting time into renewing their electricity or gas accounts will notice that prices are significantly higher than this time last year.
In the summer of 2020, the energy market in Ireland bottomed out and hit record lows. Demand was non existent and supply was plentiful resulting is extremely low prices. Summer 2021 has been the polar opposite, demand has been high and supply low resulting in extremely high prices. Was your business one of the lucky ones that locked in for multiple years in 2020?
If not, don’t worry. This is not expected to be a sign of the things to come. There are very specific reasons both happened. The 2020 slump was down to Covid, plain and simple. The economy shut down, and gas was not used as a result. But the reasons for the 2021 highs are more complicated.
April and May were the coldest in 100 years, resulting in gas that usually goes into storage being used. This meant very low storage levels expected for winter 2021. This increases risk for that period. Add into the mix high demand and prices in Asia sucking up all of the available liquid natural gas. Record high carbon prices pushing a switch from coal to gas electricity generation, and the result gas prices at 85p per therm. In July 2020 that figure was 15p.
We expect that both years are outliers, and if you want to know what your 2022 budget should look like, you should look to the 2018 or 2019 spend for a more realistic figure. The gas price in July 2019 was 30p. We would expect something closer to this level in 2022.
The best way to make sure you pay the lowest and most competitive price for your business energy is to make sure you are in contract with your supplier. With so many energy suppliers in Ireland competing for your business it's difficult to recognise which contract is the best for your business.
At EnergyBroker you can send us in a copy of your latest business energy bill and we will conduct a free, no committal analysis and send you a price comparison and recommendation.
Get in touch today to find out how much your business could be saving.