The above diagram gives a good indication of where gas prices in the EU are at. It reveals that gas prices have hit a six year low i.e gas prices have not been this low since 2009. Gas power is usually the last generator called on by the National Grid in Ireland so this is the one that sets the wholesale price of electricity for all generators (under the merit order system).
If we look at a recent wholesale price (SMP) profile we can see that it is well below € 50 / MWh, at about € 30 / MWh :
Indeed, we can see that back in February this year it was up around the € 50 / MWh mark :
But still electricity bills are not getting cheaper. This amounts to an abuse of the free market, a market all consumers should be entitled to participate fairly in. The excuse of rising prices for fossil fuels is often used as a justification to hike bills but the opposite doesn't happen here in Ireland, the land where the electricity consumer can be milked till the cows come home.
The guy supposed to be regulating this can be contacted at info@cer.ie
Writing in today’s Independent, former Fine Gael agriculture minister Ivan Yates writes that “Gearing up for extra output, dairy farmers have invested heavily in advanced capacity of dairy parlours and other equipment, more in-calf heifer numbers and extra land".
ReplyDeletehttp://www.independent.ie/opinion/columnists/ivan-yates/all-is-not-well-down-on-the-farm-and-our-agrifood-sector-faces-major-challenges-31553999.html
He goes on to say "Average low levels of borrowings of circa €30,000-€80,000 have doubled. The sad truth remains that, despite all that, they have seen more money going out for less return.
An income crisis now looms because of the slump in international/EU prices for dairy products. Production levels have significantly increased in Poland, the UK, Denmark, Netherlands and Spain. Overall EU production will be up 1pc in 2015.
Outside the EU, production from both the US and New Zealand is up 3-4pc. At the same time, demand has actually weakened.
Chinese milk powder imports dropped, while the Russian embargo adversely impacts exports. Butter prices are less affected than powders, but most recently Global Dairy Trade auction prices signalled further declines over the coming months.
On top of all this, the expected lower input costs from cheaper energy haven't resulted in cheaper fertilisers and feedstuffs costs remain high. The stark truth is that commodity prices in dairy face further short-term depression”.
Agriculture is the backbone of rural Ireland, providing upward of 18% of national employment. Dairy farmers are at the heart of Irish agriculture and are the most productive (grassland fertilisers), efficient (optimal genetics), hard-working (seven-day week - morning and evening) people in the country.
They have expanded in good faith on the advice and promises of the Government, which include amongst others, a commitment to reduced farm electricity costs from all the low-cost wind energy. Why is the Commission for Energy Regulation not fulfilling its role in facilitating the future of Irish agriculture by bringing down electricity prices from the third highest in Europe?
Im afraid many businesses and farmers are in for a rude shock in the coming years. The full impact of the Govts plans for the electricity sector have not hit our bills yet. I believe it is the "elephant in the room" that will soon destroy plans for investment and growth in the economy.
DeleteThe main problem is that we have an Energy Minister who is clueless as to what he is doing.
In UK there is frequently uproar about this, plenty of media coverage but media silent here in Ireland
ReplyDeleteMick Blake provides the reason at https://www.youtube.com/watch?v=9sAowRrD4hg
DeleteThis is true Paul, electricity prices were a big election issue in the UK with Ed Miliband's price freeze strategy back-firing on him when the prices came down, as they did here, and costing him more votes.
DeleteIt seems that questioning prices of other goods like water is okay but electricity is not a big issue in Ireland with grants been given to charities to pay bills for the poor. Most of the media seem to be sponsored by energy companies which silent dissent.