Energy bills might begin to fall in autumn, economist predicts

Vivienne Clarke

Economist John FitzGerald has said that it will be the autumn before there will be “some decreases” in energy bills.

Falls in gas and wholesale electricity prices take time to feed through to bills, because suppliers buy the energy they provide to households several months in advance.

“But one of the problems is we don't know to what extent companies have bought gas forward,” Mr Fitzgerald told RTÉ’s Morning Ireland.

The ESB bought some of its energy “three years forward” which has fixed prices, he explained.

While there “undoubtedly” have been “exceptional profits”, the company that sells electricity actually made a loss when they gave back €50 to customers. The profits are being made in electricity generation, Mr Fitzgerald said.

However, there was a problem in the longer term as there needs to be reform of the sector for electricity generators and that needs to start in Europe, he said.

"It needs to come from Europe. But the complication in the Irish case is we need Northern Ireland to agree and Northern Ireland have actually made life more difficult. And you also need a government in Northern Ireland before you reform the market."

Mr Fitzgerald, a member of the Climate Change Advisory Council, said gas prices today are three times what they were in 2019 – the likelihood was that while prices will “fall back a bit” but they will not go back to 2019 levels.

When asked about the impact of renewables on the price of electricity, Mr Fitzgerald replied: "If you look back on your electricity bills over the last decade, there was the public service obligation.

"You are paying money to subsidise renewable energy, but actually the price of electricity was lower because of renewable energy and it actually saved us money. So doing the right thing for the climate and electricity so far has saved us money".