Since the beginning of 2024, wholesale electricity and gas prices in Ireland have decreased by 10%, following a 50% drop in 2023. This came after a challenging year in 2022 when prices tripled due to Russia's invasion of Ukraine and Europe's decision to stop purchasing natural gas from Russia. Consequently, electricity and gas prices have been very high for both businesses and consumers.
Conflict, climate, and global politics influence the cost of energy in Ireland. Although these events occur at a distance, an intensification of the ongoing conflict between Israel and Iran could affect the prices we pay to heat and run our businesses this winter.
Provided that natural gas storage remains robust, supply remains uninterrupted, weather conditions are mild or normal, and there are no political conflicts affecting energy-exporting nations, we might witness a further reduction in wholesale energy prices in early 2025.
What drives business energy prices?
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Electricity prices are closely linked to natural gas prices. Annually, around 50% of Ireland's electricity is generated from gas-fired power plants. Wind energy, the largest renewable and non-gas-fired source, contributes variably depending on wind conditions each day. The rest of the electricity is produced from hydro, solar, and fossil fuels, which constitute a minor share of the overall generation.
EnergyBroker Daily Gas Tracker for December 2024
- Wholesale energy prices have already dropped more than 50% compared to the peaks in summer 2022. This means that your business could be looking at considerable energy cost savings in 2025. In addition, if your business agreed to an expensive contract in 2023 or 2024, it might be worth breaking your old contract early.
- We expect wholesale energy prices to be supported at current levels through early winter with a slight downward bias. Assuming healthy natural gas storage levels, no supply disruptions and mild/normal weather, we may see a further easing in wholesale energy prices in early 2025.
