Gas prices could remain “significantly high” for at least the next three years as the outlook for energy costs continues to deteriorate, the Utility Regulator has warned.
Consumers are facing 100% increases in their gas bills because of the jump in global wholesale prices this year, which has also had a knock-on effect on electricity bills.
Utility Regulator John French predicted in October that rising energy prices would continue into the middle of next year. However, he has now said prices could still be high in three years.
A wholesale gas curve from the Zenergi website cited by the regulator predicted a price in 36 months of approximately £1.20 per therm.
In August, the wholesale cost of natural gas was £1.15 per therm, a then record high. It had more than doubled to £2.40 by mid-October, prompting suppliers to put up their prices.
Formerly, the price per therm was between £0.40 and £0.60.
Mr French told the Belfast Telegraph the outlook was bleak.
“The current forward curve for wholesale gas shows that there will be high gas prices for at least the next three years,” he said.
“This position may change if there was an increase in gas supplies from the likes of Russia, Qatar and the US, and there was less demand for natural gas due to a milder winter.
“We are acutely aware that the cost of energy is a real concern for both households and businesses. Therefore, if wholesale prices begin to reduce, our system of regulation in Northern Ireland allows us to act to make sure that reductions are fully passed on to consumers as quickly as possible.
“We would encourage anyone who is struggling with their electricity or gas bill to contact their energy supplier as soon as possible. Help is available and we expect all suppliers to provide the appropriate support and information to help their customers at this time.”
In a briefing to the Stormont economy committee about the impact of the small-scale green energy bill, Mr French warned that consumers were particularly vulnerable to any added costs which could come from permitting small energy connections.
Increased costs for consumers could be an “unintended consequence” of a policy of such generation, he said.
Mr French added: “Consumers in Northern Ireland are probably the most vulnerable in the UK and the margin of error is small when it comes to making energy affordable.”
He said small-scale generation projects, such as those undertaken within communities, would often need back-up systems if renewable methods such as wind generation under-performed, as they have done throughout this year.
Some homeowners turn to small-scale generation as a means of producing their own energy and avoiding price increases from suppliers.
Firmus Energy put its prices up by 35.15% across the 10 towns it supplies outside Belfast from the start of October, while SSE Airtricity Gas increased its tariff by 21.8%.
In November, Power NI announced an increase in prices of 21.4% from January, equivalent to an extra £2.51 a week on the typical electricity bill.
SSE Airtricity and Budget Energy have also increased their prices.
Also last month, Firmus announced a further 38.18% increase to its natural gas tariff in the 10 towns network from December 3.
Rising wholesale gas prices have also resulted in rising home heating oil costs.
