Households will see their energy bills fall 'significantly' in first half of year

Energy Minister Eamon Ryan has said that reductions in wholesale gas prices will lead to further cuts in home energy costs early in 2024.

Taoiseach Leo Varadkar has encouraged energy companies to begin reducing prices, as Eamon Ryan expects household bills to fall “significantly” next year.

A reduction in wholesale gas prices has led Mr Ryan to expect further cuts to home energy costs early next year.

“My expectation for the householder is we’re going to see prices fall quite significantly in the first quarter, or first half, of the year,” Mr Ryan said.

He said he believed this would happen due to a fall in gas future prices in the UK, which have decreased to 81p a therm (a unit of heat used for measuring a gas supply) for next month compared to recent highs over the last two years of up to 140p a therm.

“That is significant,” Mr Ryan said. " For the last year and a half, two years, that figure has been in the 100, 110, 130, 140 pence a therm.”

He admitted that it is above the historical average of 50p for a therm of gas, but that it is now “on the way down”.

This means that while it won’t return to prices before the cost-of-living crisis began, it “won’t be the exceptional prices of the last two years”.

Asked about this, Mr Varadkar said he expects to see further price cuts next year and that he is encouraging energy companies to reduce charges on customers.

“Certainly I would encourage those companies to further reduce prices into the New Year, but I can’t really exactly predict by how much,” Mr Varadkar said, adding that people will still receive their energy credits next year.

Mr Ryan said that he didn’t believe the prices would increase again due to increased electricity interconnection with other states.

“Because of all this interconnection with Danish wind, Norwegian hydro, French nuclear is going to keep driving that price down,” Mr Ryan said, meaning that household bills would fall as a result.

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Last week, SSE Airtricity announced that it would be cutting its prices by 12.8% for electricity customers and 11.5% for gas customers. This cut, due to come into effect on February 1, follows previous price reductions by the provider in the last three months.

Mr Ryan said that following the SSE Airtricity cuts, he expected other energy companies to follow suit due to competition.

Environment Minister Eamon Ryan says he expects other energy companies to follow suit of cuts made by SSE Airtricity recently. Picture: Brian Lawless

He said that interconnectors with countries like the UK and France “bring huge benefits” and that investment into the Irish electricity grid is necessary.

“Now I think it’s a question of when we make the shift, not if. We are going renewable, backed up by battery storage and interconnection,” Mr Ryan said.

He said there must not be “false promises” about extremely low costs for renewable energy, but that it would be “a hell of a lot lower the cost than the fossil fuel alternative”.