A projected rise in interconnector exports and reduction in imports has led Cornwall Insight to raise its prediction for long-term power prices in Ireland.
Cornwall Insight had previously indicated that power prices in Ireland would fall below €100/MWh from 2026 however, in its latest All-Island Power Market Outlook to 2030, the market research company used data modelled from Q1 2023 to project that prices will only level out at roughly €100/MWh from 2027 up until 2030.
Figure 1: Irish Power price forecasts – average price per fiscal year
According to the company this is due to lower capacity in the continent alongside the impact of lower French nuclear production contributing to rising prices.
Summer prices are expected to be particularly affected due to import and export balances shifts which narrow the gap between seasonal prices.
Although 2023 prices are expected to remain high, the mid-term outlook is more optimistic as more renewable generation sites come online in Ireland.
The completion of the North-South interconnector, linking Northern Ireland with Ireland, is expected to lower prices even further.
Th electrification of Ireland’s economy – specifically heat and transport – alongside higher export volumes to the continent towards the end of the decade are expected to help stabilise and significantly lower the current power price rates, concluded Cornwall Insight.
“The overall direction of the power prices out until 2030 is positive and we are continuing to see predictions up to mid-2020 fall as the closure of high-cost fossil fuel plants makes way for lower-cost offshore wind and solar. While prices level out later in the decade, they are poised to remain significantly lower than the historical highs witnessed in the past two years,” said Ruth Young, Senior Consultant at Cornwall Insight.
“While the outlook gives us reasons to be positive, the rise in our long-term forecast is still a worry. The electrification of the economy in Ireland was always going to raise demand and with it prices. However, since our previous forecasts, concerns regarding lower energy capacity on the continent have increased. Due to a rise in export requirements and limited import capabilities, prices are expected to remain significantly higher than pre-pandemic levels.
“Despite raised predictions, we are cautiously optimistic that the worst of the energy crisis is behind us and it is unlikely that the exceptional prices witnessed over the past two years will make a comeback in the next decade and likely beyond. However, the energy crisis has taught us the importance of not taking prices for granted. While we predict stability, unforeseen events could disrupt the market once again, especially considering our continued reliance on costly and volatile imports. Nevertheless, the transition towards renewable energy in Ireland, as part of its 2030 goals, offers increased energy security that we hope will help shape a more favourable and cost-effective energy landscape for the years to come.”
