herald

Monday 23 October 2017

Dan White: How you can save up to €200 on energy bills

Competition is heating up in the retail energy market with both the ESB and Bord Gais now under serious pressure from cheaper rivals ... which is good news for hard-pressed consumers who have to watch every cent

Time was, and not so long ago, when you had no alternative to the ESB for electricity and Bord Gais for natural gas.

If you had a problem with the service either of these companies was offering or the prices they were charging, then you had two choices: take it or leave it.

Not anymore. Last year, just as the recession was beginning to bite, Bord Gais entered the retail electricity market promising customers a saving of up to 14pc on their ESB bills.

Its "Big Switch" campaign fronted by Lucy Kennedy has been a huge success with 350,000 customers having switched their electricity accounts by last May.

Now the biter has been bitten as other energy companies enter the retail natural gas market. The latest to enter the fray is Flogas, which is offering customers savings of between 15pc and 20pc on their natural gas bills if they switch from Bord Gais.

The other major player in Ireland's deregulated energy market is Airtricity, which sponsors the League of Ireland.

It supplies both electricity and natural gas to retail and business customers.

How is this possible? Weren't we always told that gas and electricity were "natural" monopolies? After all, you can only have one electricity distribution or gas pipeline network.

So how can other energy companies compete with the owners of these, inherently monopolistic, distribution systems?

It's actually quite simple. Although the ESB still owns the national electricity grid it now owns less than half of Ireland's electricity generating capacity with the remainder being operated by privately owned companies and Bord Gais, which recently opened its own generating station at Whitegate in Co Cork.

There is also an electricity interconnector between the Republic and Northern Ireland with a second interconnector, between Ireland and Britain, under construction.

There is also more scope for competition in the natural gas market than most people might think.

Although Bord Gais owns the pipeline network, most of the gas consumed in this country, about 85pc, is now imported from the North Sea.

So all a competing energy company has to do is buy electricity or natural gas from another provider in Ireland or abroad and, after paying the transmission or distribution charge, supply it directly to the customer. It's that simple.

The electricity and natural gas markets for business customers have been gradually deregulated since the beginning of the last decade. However, it is only in the last couple of years that competition has come to the retail market. And not a minute too soon.

Slashed

Recent figures published by the ESB and Bord Gais revealed that 90,000 electricity customers and 23,000 natural gas customers have entered into payments plans to clear arrears since the beginning of the year.

These customers and hundreds of thousands of others who have either lost their jobs or seen their incomes slashed desperately need lower utility bills to help them make ends meet.

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