Energy Price Note-1 (1)

We have published a comparative analysis of Irish household gas and electricity prices with European prices from the second half of 2022 to 2023, when the sharpest impacts of wholesale gas market volatility began to impact customers.   

  • CRU carries out a comparative analysis of Irish household gas and electricity prices with European prices.  
  • Data shows a clear lag between increasing and decreasing wholesale prices and retail prices. 
  • Ongoing stabilising of wholesale prices observed throughout 2023 and 2024, provides further scope for price reductions by suppliers in the coming months. 
  • Report highlights that current wholesale prices are running at levels higher than in 2021, so a return to retail prices like those in 2021 is unlikely in the near term. 

The report highlights a clear time lag between when changes in wholesale gas prices happen and when those changes reach retail prices which customers are charged. The basis for the time lag is dependent upon suppliers’ hedging strategies with some suppliers buying hedging contracts up to 24 months in advance. This means that much of the current energy being consumed in Ireland today was purchased at a time when the wholesale price was higher than it has been in recent months.  

The analysis shows that supplier hedging strategies can be an effective method of providing price stability and certainty for consumers. The analysis shows hedging has protected customers from the worst effects of the spike in wholesale gas prices, which is the key driver for electricity prices. Price stability is an important component of the retail market, and it is important to protect customers from the day-to-day volatility of wholesale gas market prices. 

The stabilising of wholesale prices that have been observed throughout 2023, and into 2024 is welcomed and the CRU expects further price reductions from suppliers in the coming months. However, wholesale prices are still at levels higher than in 2021, so a return to retail prices like those in 2021 is not expected in the near term.  

The Eurostat data shows that Irish retail prices were slower to rise in 2022 than in other European countries after the Russian invasion of Ukraine. The data considers the impact of the Government Electricity Credits, as well as equivalent Government interventions in retail and wholesale markets across the EU. The most recent data shows that domestic electricity prices in Ireland were the 9th most expensive in Europe, while Irish domestic gas prices were the 5th most expensive in Europe. 

Commenting on the report, Aoife MacEvilly, CRU Commissioner, said: “We are aware of the challenges that customers face in the context of ongoing high energy prices. The CRU will continue to closely monitor retail market developments and keep customers informed. The ongoing stabilisation of wholesale markets has driven recent retail price reductions, with the scope for further reductions to follow. However, as wholesale and retail prices remain above historic average levels, we would continue to urge customers to be active in ensuring they are on the most suitable tariff for their needs. Switching supplier, renegotiating with your current supplier, or signing up for a smart tariff can deliver savings for customers. Customers struggling with arrears are also encouraged to engage with their supplier to ensure they are protected under the Supplier Engage Code.”