The narrative that electricity suppliers were quick to increase retail prices when wholesale prices started going up 2 years ago and then not pass on decreases as prices have come back down this year is just not true. The average Irish wholesale price from July 2018 to December 2020 was ~49.5 €/MWh. The average from January 2021 to June 2023 was ~171 €/MWh. This represents an increase of ~347%. The corresponding figures for average retail prices are an increase from ~25 c/kWh to ~35 c/kWh – an increase of just 139%.
Even if we take the most recent higher average retail prices of ~44 c/kWh, that still represents an increase of just 175% - still well short of the 347% increase on the wholesale side.
Aside from exceptionally high gas prices (which we’ve no say over), it’s a lack of new build gas generation over the past 5 years and very significant additional demand from data centres over the same period that’s causing high wholesale prices.
Very informative and considered analysis. Thank you
The narrative that electricity suppliers were quick to increase retail prices when wholesale prices started going up 2 years ago and then not pass on decreases as prices have come back down this year is just not true. The average Irish wholesale price from July 2018 to December 2020 was ~49.5 €/MWh. The average from January 2021 to June 2023 was ~171 €/MWh. This represents an increase of ~347%. The corresponding figures for average retail prices are an increase from ~25 c/kWh to ~35 c/kWh – an increase of just 139%.
Even if we take the most recent higher average retail prices of ~44 c/kWh, that still represents an increase of just 175% - still well short of the 347% increase on the wholesale side.
Aside from exceptionally high gas prices (which we’ve no say over), it’s a lack of new build gas generation over the past 5 years and very significant additional demand from data centres over the same period that’s causing high wholesale prices.