Plunging electricity prices signal lower bills, CSO figures suggest

Cornwall Insight last week suggested that Irish power prices are set to fall this year and into 2025.

Factory gate electricity prices plunged, signalling lower household and business bills for consumers, Central Statistics Office (CSO) figures suggest.

Wholesale electricity prices tumbled 40% in March compared to a year earlier and declined 70% compared to the same month in 2022, which was shortly after Russia invaded Ukraine and destabilised the energy market and sent energy prices soaring to reach their peak in August 2022.

The price of global crude oil and European wholesale gas also fell sharply on Monday after fears were eased that the conflict in the Middle East would escalate further, soothing inflation concerns.

Brent futures declined by 1.3% to $86.16 a barrel on Monday after spiking more than $3 a barrel early on Friday, after explosions were heard in the Iranian city of Isfahan in what sources described as an Israeli attack.

Gains dissipated after Tehran played down the incident and said it did not plan to retaliate.

Plentiful supplies of some of the biggest crude grades are limiting the impact on oil futures of conflict in the Middle East, a Reuters analysis found.

On the economic front, inflation is back in focus, with comments from Federal Reserve officials and a run of hotter-than-expected inflation data forcing a paring back of rate cut expectations last week.

This could influence the European Central Bank, which is poised to make its first interest rate cut in June following an aggressive campaign of hikes to drive down inflation.

Meanwhile, the figures from the CSO support forecasts by market research organisation Cornwall Insight.

Cornwall Insight last week suggested that Irish power prices are set to fall this year and into 2025.

The organisation said power prices are expected to drop from an average €106 per megawatt hour (MWh) during the previous 2023 to 2024 fiscal year to €91 per MWh over the 2024-2025 fiscal year, marking a 14% decrease.

“This news is positive for both households and businesses, with the trickle down of lower power prices potentially leading to cuts in energy bills,” said Cornwall Insight in its SEM Benchmark Power Price Curve report.

Food product prices

The CSO figures also showed wholesale prices for some food products increased despite falling consumer price inflation last month but most prices fell for most products in the food category.

Fish and fish products were up 7.1% in annual terms but dairy product manufacturers continued to see a decline, with prices falling 23.7%. Animal feed prices also fell 6.8% while vegetable and animal oils and fats declined around 6%.

Wholesale prices for construction products were down marginally by 0.3% in the 12 months since March 2023.

The most recent purchasing managers index for the construction industry, published by BNP Paribas, said “rising interest rates and build costs have made developers more cautious about speculative warehouse development”.

• Additional reporting by Reuters