I was delighted to be invited onto RTE’s Morning Ireland radio show this day last week to talk about our latest Q1 2024, SEM Benchmark Power Curve Power Price Predictions, you can listen to the segment at the link below. We have also included a feature article on this in our weekly subscription the Irish Weekly Bulletin released this week.
Power price predictions for 2024-25 have been on a downward trend in general, as seen in our previous release of the SEM Benchmark Power Curve in January 2024, which forecast a drop 18% from the three months prior. However, our latest projections indicate the largest fall to date, with a drop of 40% forecast for the time period of April 2024 – March 2025.
The mild winter coupled with ample gas stocks in Europe have reduced the need for a gas injection over the summer to meet targets, meaning gas prices continue to fall. However, despite these favourable conditions electricity prices in Ireland are expected to remain above historic averages. This is largely due to the impact of Europe’s increased reliance on Liquified Natural Gas shipments following the sanctions on imports from Russia.
In the medium-term, wholesale prices are expected to remain between €90/MWh and €100/MWh following a gradual decreasing trend towards the end of the decade. This sustained fall in prices can be attributed to the build-out of renewable generation which will replace coal-and oil-fired capacity with higher marginal costs.. All things being equal, this reduction in wholesale prices would be expected to trickle down to consumer bills across the island.
While the growth in renewables, driven by the 80% of electricity from renewable generation by 2030 target, is expected to deliver a continued reduction in prices until the end of this decade, it is likely that prices will likely increase again as the demand requirement across the island increases in the 2030s.
In the medium term at least, electricity prices in Ireland and Northern Ireland do, however, remain exposed to international events and vulnerable to related impacts on international commodity prices. It is therefore crucial that policy makers across the island continue to focus efforts on becoming self-sufficient in terms of electricity generation and incentivise additional renewable capacity, as well as flexible generation such as storage to connect to facilitate the energy transition.
You can find a teaser report of our Cornwall Insight Ireland Q1 2024 SEM BPC at the link here: https://lnkd.in/dKFKpc3A
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