Bord Gáis Energy swings to €30m loss in first half of year

Energy supplier Bord Gáis pledged not to increase charges in coming months after high wholesale prices left it with a €30 million loss in the first half of this year.

The company partly blamed high wholesale energy prices, which forced it to absorb higher costs, for a €30 million operating loss in the opening six months of this year.

Bord Gáis, part of British Gas owner Centrica, earned a €40 million profit during the same period in 2022.

“We do not plan to increase our retail prices in the coming months,” the company said when asked if the losses would prompt it to review what it charges homes and businesses.

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Wholesale energy prices have fallen steadily since December. On Wednesday, natural gas sold for about 76 pence sterling a-therm, the unit in which it is sold, in London.

It traded at close to £2.70 this week last year, while it hit record peaks of more than £7.00 last August amid panic buying prompted by Russia’s decision to cut supplies to Europe.

Stocks of the fuel are ahead of levels reached this time last year, while further shipments of liquefied natural gas to Europe could bolster this ahead of winter.

Wholesale electricity prices fell 35 per cent year-on-year last month to €117 a mega watt hour. Gas prices determine Irish electricity costs.

However, Irish suppliers, including Bord Gáis, have bought the energy they supply to homes and small businesses at rates higher than current wholesale prices, indicating that they are unlikely to cut domestic charges soon.

Bord Gáis managing director Dave Kirwan acknowledged that the retail side of the business was challenged in the first six months of the year.

“The benefit of being an integrated energy company means that the performance of our infrastructure and trading sides partially offset the retail losses,” he said.

“We continue to recognise the need to support vulnerable customers. To address this, last year Bord Gáis Energy established an energy support fund and we have provided €2 million from this fund to aid vulnerable customers in the first six months of this year.”

Bord Gáis has also begun work on two hydrogen-ready, 100MW flexible gas peaking plants in Athlone and Dublin, with an investment of more than €300 million.

“Bord Gáis Energy remains committed to providing reliable and affordable energy solutions for our customers. Despite the challenges posed by market conditions, we are confident that our strategic investments and customer-centric approach will continue to yield positive results in the long term,” Mr Kirwan said. “Our vision is to lead the energy transition in Ireland through the investment and development of net-zero energy solutions across the whole value stream.”

Parent company Centrica announced bumper returns for shareholders on Thursday after its first-half profits surged on an almost 10-fold increase at its British Gas supply business.

Overall, Centrica’s adjusted operating profit for the first six months of 2023 rose to £2.08 billion from £1.34 billion a year earlier. It forecast lower underlying profits in the second half of the year, when energy consumption is usually lower. – Additional reporting: Reuters