Bord Gáis Energy to drop its prices for gas and electricity

Bord Gáis Energy is cutting gas and electricity prices for households by almost €7 a month in some cases.

Bord Gáis announced the cuts a week after rival Electric Ireland said it would reduce its domestic charges.

The move came as a report from independent supplier Naturgy indicated that wholesale electricity prices were continuing to fall, raising the prospect of further cuts in what families pay for power.

Bord Gáis’s move is the second price drop it has passed on to customers in six months, as the company also cut prices in October.

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The latest price cut will take effect from May 1st, and could save dual fuel customers, those who buy both electricity and natural gas from the company, up to €82.70 in a year or €6.90 a month.

The energy supplier said it would also offer new price plans to loyal customers, offering them further price reductions.

Meanwhile, Naturgy said wholesale electricity prices in February were 41 per cent lower than during the same month last year.

The company's Energy Review and Forecast for February 2020 said a high contribution from wind power, which supplied 74 per cent of electricity, used on the 10th of the month, helped cut prices.

Analyst Lauren Stewart said renewables – mostly wind – generated 50 per cent of the electricity used during February, helping to push wholesale prices to a record low.

At the same time, Naturgy, which supplies energy to businesses, said natural gas prices, a major influence on electricity charges, were 50 per cent down, aided by high storage levels.

“Continued uncertainty caused by the coronavirus also exerted downward pressure on demand and prices for natural gas,” Ms Stewart said.

Recent falls in wholesale electricity prices prompted Bord Gáis and Electric Ireland to cut their charges.

ESB subsidiary Electric Ireland said in February it would cut prices for 1.2 million Irish homes from April 1st.

Wholesale electricity prices have been falling for some time aided by easing natural gas prices on world markets. Gas is burned to generate about two-thirds of the electricity that Irish people use.

The coronavirus outbreak in China contributed to a 10 per cent fall in the Bord Gáis Energy Index in January, with the threat of the virus adding to bearish sentiment in wholesale energy markets.