Wholesale gas prices in Europe rose by 15% to hit new record levels, fueling new concerns about business and household electricity bills this autumn.
The rise in continental gas prices was one of the sharpest since the February 24 invasion of Ukraine and followed renewed fears over the security of gas supplies from Russia to the European Union.
Both the euro and sterling fell against the dollar amid growing concerns that energy costs will lead to an industry-led recession across the continent. The euro fell below parity at 99.8 US cents.
Monday’s rise in gas prices doesn’t automatically mean bills for Irish businesses and households will rise by a further 15%, experts say.
However, gas is used by power stations from Cork to Antrim to produce much of the electricity on the All Ireland network and the rise in wholesale prices had already resulted in higher electricity prices across the board in recent months.
On the futures markets, European wholesale gas prices for delivery to customers such as power plants and large energy-hungry producers such as cement makers reached as high as €295 per MWh in September before leveling off at €280 per MW-hour at the close of trading.
Traders saw little respite from the risk of Russia turning off gas or shutting it down altogether, with prices trading at elevated levels of €290 per MW-hour in December.
Even before Monday’s price hikes, wholesale gas prices were up 11-fold. Soaring energy costs were passed on to consumers and helped push consumer price inflation to levels not seen in many European countries for 30 or 40 years.
Ireland has access to the Corrib field off the coast of Mayo for about a quarter of its annual gas needs and gets most of the rest from the North Sea.
Wind farms also account for a significant portion of total electricity use, but mainly in the late winter months when the Atlantic storms are blowing.
Gas prices are traded as a European and global product and continental prices also heavily influence Irish and UK gas prices.
“The catastrophe is already here,” said Thierry Bros, professor of international energy at Sciences Po in Paris.
In one of the direst warnings yet, Belgian Prime Minister Alexander De Croo said Europe could face up to 10 difficult winters.
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