Electricity prices will start to “come down slowly”, the CEO of Bonkers.ie has predicted. 

Following the imposition of sanctions on Russia, the price of oil and gas surged as western nations scrambled to find alternative sources of fuel.

Prices have since started to decrease and yesterday Minister for Climate Action Eamon Ryan predicted household energy bills would start to drop in the autumn.

David Kerr of Bonkers.ie said the reasons for the reduction taking so long are “pretty complicated”.

“People are hearing a lot of talk about wholesale prices reducing and they’re saying, ‘Okay, well my bill is still really, really high, why am I not seeing a reduction yet?’” he told Newstalk Breakfast. 

“There’s a few reasons for that; electricity prices are going down on the wholesale market.

“They’re calculated now at €117 per megawatt hour - but those are still record high, even though they are dropping, they’re dropping from record highs to slightly less than record highs.”

A hand counting expenses of an electricity bill on smartphone calculator. Picture by: Sergio Monti / Alamy Stock Photo

Mr Kerr noted that in March 2020, the price was €38 per megawatt hour; in effect, prices are still treble what they were three years ago.

“The electricity companies are buying ahead for a long time - 12 months, 24 months into the future,” Mr Kerr said.

“So, they’re buying ahead at higher prices and that means that when the prices reduce a little bit, we don’t see that immediately because of the lag.

“We’re getting the lumps and bumps of the wholesale market ironed out because of that hedging, because of that lag - and that’s a good thing actually.

“It just means when they start to come down, they come down slowly.”

Minister Ryan has previously lauded investment in renewable energy as a way to increase Ireland’s energy independence.

Under the 2021 Climate Action Plan, the Government aims to generate 80% of all Ireland’s electricity from renewable sources by 2030.

Main image: Electricity Pylons silhouette against a dawn sky at Ringaskiddy, County Cork. Image: David Creedon / Alamy Stock Photo