Energy prices: Ireland now in the 'most perilous position since the 1970s'
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Ireland is now in the "most perilous position since the 1970s" with homeowners set to see electricity and natural gas prices spike even further in the coming months.
That is according to one of the country's foremost energy experts, who warned that Ireland's dependence on fossil fuel, political jousting between the EU and Britain, and our location on the periphery of Western Europe will leave Irish consumers very exposed.
Dr Paul Deane, senior research fellow at the UCC-based MaREI centre for energy, climate and marine research, warned: "We depend so much on natural gas for our electricity and home heating — we use so much of it and produce so little, and we’re so reliant on transit countries like the UK.
"At the moment, we are very much reliant on international markets. You see what is happening in Germany this week where the Russians are reducing the amount of gas coming into Europe. That affects us here, if there is a scarcity in Europe, that reverberates."
The current supply squeeze in the continent will reach Ireland's shores if it worsens, he warned.
"We are all shopping in the same supermarket for the same gas, and the amount of gas coming into the shop is getting lower and lower.
"Our position on the periphery of Europe is precarious, because if there is any disagreement between the UK and Europe on natural gas arrangements, Ireland will end up being collateral damage. The bulk of our gas — 70% — comes through the UK.
"It is sourced from different places, such as the continental shelf and Norway, but we are very much beholden to what happens in the UK. Geopolitically, the UK is proving itself not to be the most reliable in terms of standing over international agreements. If there is gas rationing in the UK, it will very much affect us here," he said.
The risks for oil are not the same as for natural gas at present, which means petrol and diesel prices should begin to fall. However, gas-powered home heating and electricity will likely offset any price drops in transport, he said.
"I can see oil markets rebalancing in the coming months and petrol and diesel prices coming down under €2 a litre to around €1.90, and home heating oil also coming down slowly. That is because the global economy is slowing down, and trucks and planes around the world are using less oil, which gives us some headspace.
"However, the risk is different for natural gas.
"They are likely to go even higher between now and Christmas, even though companies like Electric Ireland have already raised their prices recently.
"Irish companies are really caught, because they do have to buy their gas on international markets, they do need gas for electricity. They are trying their best with hedging strategies, but the market is way ahead of those hedging strategies now."