Wholesale electricity prices unexpectedly rose last month — despite demand slumping with large parts of the economy shutting down amid the Covid-19 crisis — because the wind blew less as the good weather settled in across the land.
Figures from the monthly report by Bord Gáis Energy show that wholesale electricity prices rose 3% because a significant chunk of the power generated in the all-Ireland power market relies on wind farms.
The report may suggest that retail electricity prices may not fall as sharply as many consumers might have thought when the wholesale prices are eventually passed onto households and their electricity bills despite the price of crude oil having continued to tank in March.
Nonetheless, wholesale electricity prices had already tumbled by 22% in February following the sharp falls in crude oil and because the wind did blow that month. In March, the wind generated 44% of total power, down from the 56% share in February, according to Bord Gáis.
There was better news for households as wholesale gas prices in March fell by 3%. That was on top of February’s gas price plunge of 21%. Wholesale coal prices rose in March rose by 3% as Chinese factories started to open up again from their extensive Covid-19 lock downs. Overall, the Bord Gáis index, which tracks all the wholesale energy price inputs, tumbled by 37% in March. In February, the weighted index had slid by 15% — as wholesale electricity and gas prices both fell.
In March, Bord Gáis put the average cost of Brent crude oil at $22.70 a barrel, down from $52.50 a barrel in the previous month. Bent was trading yesterday at below $34 a barrel after clawing back some of its huge losses in recent months.
The big oil producing nations are struggling to agree some sort of accord to cut production to drain some of the oil glut on world markets.