Energy prices are expected to fall slowly after a “market catastrophe” that began with Russia’s invasion of Ukraine in 2022.

That’s according to Bonkers.ie founder David Kerr who said Ireland’s reliance on natural gas meant it was particularly susceptible to rising electricity costs during the war.

Russia is the world's second-largest producer of natural gas, a resource that generated 47% of electricity in Ireland last year.

On Newstalk Breakfast today, Mr Kerr said gas prices are “very volatile in wholesale markets”.

“We’ve seen a massive increase since the war in Ukraine in that wholesale price in gas," he said.

“It caused a catastrophe in the market and prices doubled in a short space of time.

“In Ireland, it’s primarily natural gas and wind that that produces our electricity.

“Wind is great but people think it’s free and it’s not free to connect to the network or manage and maintain.”

An offshore windfarm in the north of England. Image: Islandstock / Alamy Stock Photo

Mr Kerr said prices will now start to come down again slowly.

“I’d say they will come down slowly because of the hedging strategies of the suppliers,” he said.

“You must remember, we used to have 14 suppliers of electricity in Ireland but four have gone bust now and exited the market.

“Since September 2022, when we had the biggest crisis of all, the entire gas and electricity market effectively shut down for a year and customers couldn’t get a good rate because there weren’t any available - the shelves were empty.”

Fixed-rate prices

Mr Kerr said a lot of people are sick of electricity price volatility and are switching to fixed rates at the moment.

“The top four or five rates right now in the electricity market, and on the gas market, are for fixed rates,” he said.

“That’s when a supplier says, ‘We can supply it and we’ll guarantee this rate for a 12-month period and in turn you won’t be exposed for any up or down fluctuations.’

“A lot of people want that comfort, they want to know how much they’ll pay every month.”

Mr Kerr said you can also stick it out either and hope prices go down – which seems likely.

“You could sit tight for a bit and switch to a variable rate, that’s what a lot of people are doing,” he said.

“Things are likely to reduce over time, but we don’t know when and we don’t know what could shock that expectation in the meantime.

“If you want certainty, go fixed – it’s much like the mortgage market.”

Wind accounted for 39% of all electricity produced in Ireland last year.

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