We are at the mercy of global markets

The cost of energy and heating our homes has risen significantly in the last twelve months, and although the reasons behind this are widely commented upon, they are perhaps not yet fully understood.

By Niall Martindale
Friday, 18th March 2022, 12:37 pm

The cost of energy and heating our homes has risen significantly in the last twelve months, and although the reasons behind this are widely commented upon, they are perhaps not yet fully understood.

Northern Ireland is at the mercy of the wholesale global markets and that’s because we import all of our natural gas supplies. Natural gas is a commodity which is bought and sold much like wheat or gold, and we have to purchase it in the wholesale marketplace. Every supplier in Northern Ireland and Great Britain buys their natural gas at the same National Balancing Point (NBP) which is the name of the virtual trading platform used for the sale and purchase of UK natural gas. As such, all natural gas suppliers in Northern Ireland and Great Britain are exposed to the same prices and market volatilities.

This rise in demand has been exacerbated by a range of additional global supply factors, most notably and recently, events in Ukraine. Tensions arising from the planned and actual Russian invasion of Ukraine and concerns regarding gas supply from Russia to Europe began to influence market prices in the summer of 2021 and escalated following Russia’s invasion on 24th February 2022. This has led to gas trading markets becoming more volatile and large price movements (or swings) being witnessed daily, resulting in significantly higher average prices over the past number of months.

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Niall Martindale

For homeowners, the situation has been hard-hitting as the rises have come on the back of historically low wholesale prices in 2020. Alongside increases in inflation, the price of food, petrol, and diesel are understandably causing the budgets of homeowners to creak.

firmus energy’s tariff for consumers (in the Ten Towns network, including Derry) is authorised by the Utility Regulator, following scrutiny by the Department for the Economy and Consumer Council for Northern Ireland (CCNI). firmus energy is always working to bring the lowest tariffs to our customers and this is supported by the independent approval of organisations with a particular focus on consumer protection. Our tariffs are set with the aim of fairly and transparently reflecting the price firmus energy has to pay to secure natural gas on the wholesale market.

Indeed, we welcomed the comments made by Noyona Chundur, Chief Executive of the Consumer Council, who sought to bring clarity to the situation in her paper entitled ‘More to be done to protect consumers amidst rising energy prices in Northern Ireland’.

Within it, Noyona said that local energy companies cannot be held accountable for global prices which she independently identified as being driven by geo-politics and production constraints.

Despite the reasons why current prices remain stubbornly high, the reality is that higher costs will never be welcome news.

The truth is we can’t influence wholesale prices, but we can help customers better manage their energy usage to help keep their costs to a minimum. We have been developing and are on the cusp of launching a major initiative called ‘Let’s Save Energy’. This has been developed in collaboration with our dedicated team of energy advisors, all of whom are City and Guilds Energy Awareness accredited to help customers to save energy in their homes.

We will be supporting this initiative with a series of videos on our website, social media and roadshows across the major towns in our network area where customers can drop in, get personal energy advice, ask questions and return home with an action plan allowing them to save energy in their home.

We are also collaborating with stakeholders and other organisations who can offer assistance and support to customers. In fact, we have been providing financial and administrative support to the Department for Communities scheme to help those most in need and will continue to do so.

Our customer services team, which is also City and Guilds Energy Awareness accredited, is available 24/7 and we encourage any customer who is having difficulty with their energy costs to contact us, and we will work with you to find a solution together.

firmus energy has worked hard to help its 60,000 customers in its Ten Towns network and we really value that relationship.

We are working to support our customers as we all face the challenges of rising costs of living and the uncertainty surrounding the war in Ukraine.

Everyone at firmus energy wants to be here for our customers when we all emerge from the current set of challenging circumstances, and we are extremely grateful for the continued and valued support of each and every one of our customers.

Niall Martindale is Interim Managing Director, firmus energy