Wholesale cost of electricity hits three-year low

It's forecast customers will 'see another round of price cuts in the second half of the year'

Electricity prices are now at their lowest levels since March 2021.

The wholesale cost of electricity fell by 47% during February compared to the same period last year dropping to its lowest levels in nearly three years, new data from the Central Statistics Office (CSO) shows.

According to CSO’s wholesale price index, wholesale electricity prices are now at their lowest since March 2021 before prices spiked in 2022 during the invasion of Ukraine.

Daragh Cassidy of price comparison website Bonkers.ie said that the drop in electricity prices is largely on the back of falling gas prices as well as strong wind energy output.

"Wholesale prices are now at their lowest level since the start of 2021 before a host of events caused prices to skyrocket over the next two years,” he said.

Wholesale electricity prices fell by almost 47% in the 12 months to February 2024https://t.co/U7h6Jlr4JB#CSOIreland #Ireland #Wholesaleprices #Prices #Business #BusinessStatistics #IrishBusiness@RobertShortt @joemagraollaigh pic.twitter.com/AKEwhtyWnf

— Central Statistics Office Ireland (@CSOIreland) March 22, 2024

"Due to hedging it takes time for price decreases on wholesale markets to feed through into lower bills for consumers. However, if wholesale prices remain close to where they are, it’s highly likely we’ll see another round of price cuts in the second half of the year of between 10% and 20%.” 

The data also shows that producer prices for food products dropped by 9.3% in the year to the end of February with a notable drop in dairy products, down 28.5%. However, there was also a number of increases with beverage prices going up 11% and fish prices going up 7%.

Statistician with the CSO, Deirdre Toher, said overall wholesale price inflation increased in February 2024 by 1.1% in the overall Producer Price Index for manufacturing industries in the month.

Overall, manufacturing producer prices were 3.3% higher in the year while producer prices for exported goods rose by 3.7%.

The wholesale price for construction materials was down 0.7% over the year.