Energy suppliers in Ireland are facing pressure to reduce their tariffs following an announcement by Pinergy of a second decrease in prices. From October 1, the company will reduce its standard residential electricity prices, resulting in a 9.5% decrease in the typical household bill. Pinergy had already reduced its tariffs earlier this year in March. The decision to lower prices comes as a result of a decline in electricity pricing in the wholesale market over the past few months. However, Pinergy’s CEO, Enda Gunnell, cautioned that the energy crisis is far from over and wholesale pricing remains volatile and inflated.
The Central Statistics Office (CSO) has released figures showing that wholesale energy prices across the economy fell by 5.2% in July compared to the same month last year. This marks the largest annual wholesale inflation fall in over two years. The CSO specifically highlighted the significant drop in electricity prices, with wholesale electricity costs being 64% lower than in July 2022, and the lowest they have been in the past two years. Despite this positive development, Mr. Gunnell stressed the need for policy makers to invest in market reforms to expedite the energy transition for everyone.
Darragh Cassidy, from the price comparison website Bonkers.ie, welcomed Pinergy’s decision to lower prices and predicted that other energy suppliers would follow suit in the coming weeks. As their hedging strategies unwind further and they purchase electricity at the current slightly lower wholesale prices, Cassidy expects similar price decreases to be announced. Nevertheless, he noted that wholesale electricity prices in Ireland are still approximately three times higher than normal levels. Consequently, there is a limit to how much prices for consumers can drop at present. Cassidy also emphasized that there will be no energy “price war” or a return to normal energy prices for the upcoming winter. With Pinergy’s second price cut, the standard unit rate, including VAT, is now over 41 cent, in comparison to the EU average of around 26 cent. As a result, heating and lighting homes during the winter months are expected to be costly once again.
In conclusion, Pinergy’s announcement of a second decrease in electricity prices has put pressure on other energy suppliers to follow suit. While wholesale energy prices have experienced a decline, the energy crisis is far from resolved. Consumers should not expect a significant drop in prices, and heating and lighting homes during the winter months will likely remain expensive. Policy makers are urged to invest in market reforms to facilitate the energy transition for all.