Wholesale energy prices across the Single Electricity Market (SEM) fell to record lows in April.
Joe Camish, an analyst at Cornwall Insight Ireland discusses the impact of changing wholesale energy prices will have on consumers across Ireland.
The most prominent of these were the movements in the day-ahead power price. Across April the price averaged €28.0/MWh, the lowest monthly average since the commencement of project I-SEM back in October 2018.
The monthly average also represented a €6.3/MWh reduction on the previous month, and a €21.4/MWh discount year-on-year.
“Power prices were influenced by the well-documented drop in demand stemming from the COVID-19 lockdown measures. This has seen power demand fall by 20% on average since the start of March.
“Prices were dragged lower by other market movements, for example, day-ahead NBP gas prices dropped 40%, reaching a 14-year low mid-month. In addition, Brent crude oil and coal prices fell 23.1% and 19% month-on-month respectively.
“The downward power price movements have been muted by the low wind generation throughout the month. Wind generation accounted for 25.1% of the generation mix in April the lowest levels so far this year. If April was as windy as March, we could have potentially observed even more depressed prices throughout the month.
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“It will be interesting to see the impact of these changes in the prices paid by consumers. The reductions in the regulated electricity tariff in Northern Ireland specifically cited those wholesale price movements. Will electricity users across the island benefit from these price changes?”
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