23
Ireland d’s Low Cost Energy P Provider 10 th Nov 08
Irelandd’s Low C
osst Energy PProvider
10th Nov 08
Contents
Ireland • Price Increase’s Low C
os
• Market Structure• Price Setting Process
st Energy P
• Underlying costs and trends• Summary
Provider10
thNov 200
www.bordgaisenergysupply.ie2
08
Price Increase
Ireland 3.9% Average Increase’s Low C
os
Domestic (Standard Domestic Rate)4 2%
st Energy P
• 4.2%• €6.30 (inc VAT) increase on average bill
Provider
SME (Medium Business User Rate)• 2.8%• €17 (inc VAT) increase on average bill
10thN
ov 200
• €17 (inc. VAT) increase on average bill
www.bordgaisenergysupply.ie3
08
Latest EU Tariff Analysis
Ireland
y
Medium Residential Customer’s Low C
os
Medium Residential Customer 5.6 Mwh < Consumption < 55.6 Mwh
25
30
ncl)
st Energy P
Average: 17.28
15
20
J (A
ll ta
xes
in
Provider
5
10
PPS/
Euro
GJ
10thN
ov 200
0
P
www.bordgaisenergysupply.ie4
08
Market Share
Ireland’s Low C
os
BordGáisE
st Energy P
EnergySupply39%
Provider
Others61%
10thN
ov 200
www.bordgaisenergysupply.ie5
08
Market Segments
Ireland
g
Power - Unregulated
’s Low C
os
LEU - Unregulated14%
4%1%
st Energy P
RTF - Price Regulated
FVT Price Regulated69%9%
4%
Provider
FVT - Price Regulated
SME - Revenue Regulated
3%
10thN
ov 200
Domestic - Revenue Regulated
www.bordgaisenergysupply.ie6
08
CER Price Setting Process
Ireland
g
• 5 Year Revenue Review ’s Low C
os
• Annual review – option for mid year review
st Energy P
• Bord Gáis Energy Supply apply for price change
Provider • Open, Transparent and Consultative approach
10thN
ov 200
www.bordgaisenergysupply.ie7
08
What makes up your gas bill?
Ireland
p y g
Gas Commodity
8%
’s Low C
os
Gas Commodity
Transmission Tariffsst Energy P
Transmission Tariffs
Distribution TariffsProvider
Retailers Costs
10thN
ov 200
Profit Margin
www.bordgaisenergysupply.ie8
08
Gas Commodity - Wholesale Market
Ireland
y
• 90% of Ireland’s gas requirements sourced in UK’s Low C
os
• Since 2005, the UK is a net importer
st Energy P
• This links UK prices with European prices
Provider
• Many price drivers:– Weather patterns, – Demand
10thN
ov 200
Demand, – Production flows, – Electricity markets,
Oil & coal prices etc
www.bordgaisenergysupply.ie9
08 – Oil & coal prices etc.
Gas Procurement – Market Benchmark
Ireland
Smoothed Gas Cost = Laddered Approach
140000’s Low C
os 100000
120000
st Energy P 60000
80000
100000
Provider
20000
40000
60000
10thN
ov 200
0
20000
Oct - 1 Yr. Nov - 1 Yr. Dec - 1 Yr. January February March April May June July August September October
www.bordgaisenergysupply.ie10
08
Pricing
2008/09 Gas Year Wholesale Pricesf O t b 2007 O t b 2008
Ireland
from October 2007 – October 2008
Current Gas Year Prices
’s Low C
os
90
100
110
Winterst Energy P 70
80
90
/ther
m
Winter Contract
Provider
50
60
p/
SummerContract
10thN
ov 200
30
40
Oct-
Oct-
Oct-
Nov-
Nov-
Nov-
Dec-
Dec-
Jan-
Jan-
Jan-
Feb-
Feb-
Feb-
Mar-
Mar-
Apr-
Apr-
Apr-
May-
May-
Jun-
Jun-
Jun-
Jul-08
Jul-08
Jul-08
Aug-
Aug-
Sep-
Sep-
Sep-
www.bordgaisenergysupply.ie11
08
07 07 07 07 07 07 07 07 08 08 08 08 08 08 08 08 08 08 08y08
y08 08 08 08
g08
g08
p08
p08
p08
Gas Commodity
Ireland
y Historic and Forward Wholesale Gas Price in p/th at the NBP
110120
Stg p/th
’s Low C
os
708090
100110
st Energy P 40506070
Provider
0102030
10thN
ov 200
Jun-07Oct-
07Feb
-08Jun-08Oct-
08Feb
-09Jun-09Oct-
09Feb
-10Jun-10Oct-
10Feb
-11Jun-11Oct-
11Feb
-12Jun-12Oct-
12Feb
-13
Historic Month Ahead Actual Prices Forward Curve 13th Oct 2008
www.bordgaisenergysupply.ie12
08 Historic Month Ahead Actual Prices Forward Curve 13th Oct 200812 Month MA
Changes in Forward Prices
Ireland
gUK NBP Forward Curve Comparison (Oct 07, Jul 08, Oct 08)
120
’s Low C
os 80
100
st Energy P
60
p/th
erm
(stg
)
Provider
20
40 Winter 08 Summer 09
19 Oct 07 49.62 42.67
4 Jan 08 59.08 49.13
10thN
ov 200
0
3935
6
3941
7
3947
9
3953
9
3960
0
3966
1
3972
2
3978
3
3984
5
3990
4
3996
5
4002
6
4008
7
4014
8
4021
0
4026
9
4033
0
4039
1
4045
2
4051
3
4057
5
3 Jul 08 109.74 94.75
10 Oct 08 82.33 67.97
www.bordgaisenergysupply.ie13
08
FC on Oct 15th 2007 FC on July 15th 2008 FC on Oct 15th 200
Brent Crude Oil
Ireland
130
150
’s Low C
os 110
130
st Energy P
90
Provider
70
10thN
ov 200
50Jan07
Mar07
May07
Jul07
Sep07
Nov07
Jan08
Mar08
May08
Jul08
Sep08
www.bordgaisenergysupply.ie14
08
Ireland
NBP Winter 2008 (LHS) v Brent Crude (RHS) to Date
120pence/therm
160USD/barrell
’s Low C
os
100
120
140
st Energy P 60
80
80
100
Provider
20
40
40
60Norwegian Restriction in
Supply
10thN
ov 200
0
20
01/10/07 01/11/07 01/12/07 01/01/08 01/02/08 01/03/08 01/04/08 01/05/08 01/06/08 01/07/08 01/08/08 01/09/08 01/10/080
20pp y
www.bordgaisenergysupply.ie15
08
NBP Winter 2008 Brent Crude
Gas Transportation
Ireland
p
• Subject to regulatory review
’s Low C
os
• Regulated charges applied to all suppliers equally• Small reduction in transmission charges • Small increase in distribution charges st Energy P
g• Overall transportation charges remain constant
400450500
min
al)
Provider
200250300350400
r Cus
tom
er (N
om
10thN
ov 200
050
100150
2004/05 2005/06 2006/07 2007/08 2008/09
€ C
ost P
er
www.bordgaisenergysupply.ie16
08
Supply Operating Costs
Ireland
pp y p g
70’s Low C
os 50
60
(Nom
inal
)
st Energy P
30
40
50
Cus
tom
er (
Provider 20
30
Cos
t per
C
10thN
ov 200
0
10€
2004/05 2005/06 2006/7 2007/08 2008/09
www.bordgaisenergysupply.ie17
08 2004/05 2005/06 2006/7 2007/08 2008/09
Profit Margin
Ireland
g
• 2003 - 1.3%’s Low C
os
• 2007 - 2% f
st Energy P
– to reflect competitive market environment
• 2008/09 2 9%Provider
• 2008/09 – 2.9% – 15% of the gas price volume risk.
10thN
ov 200
• BGES proposes to maintain the margin at 2% subject to the agreement of the CER.
www.bordgaisenergysupply.ie18
08
Recap- What makes up your gas bill?
Ireland
p p y g
Gas - Wholesale Market’s Low C
os
Benchmark
Transmission - Regulatedst Energy P
charge for all suppliers
Distribution - Regulated chargefor all suppliersProvider
for all suppliers
Retail - Regulated with 3%Efficiency Improvement
10thN
ov 200
y p
Profit Margin - Regulated 2%
www.bordgaisenergysupply.ie19
08
Supplier Costs – Mitigation Factors
Ireland
pp g
• Margin’s Low C
os
• Margin– Should move to 2.9% – BGES proposed to maintain current arrangements 2%st Energy P
• K-Factors– BGES foregoing €15.6m recovery of 2007/08 costsProvider
R d d th J 1st bill i f
10thN
ov 200
Reduced the January 1st bill increase from approximately 10% to 3.9%
www.bordgaisenergysupply.ie20
08
Bord Gais & Fuel Affordability
Ireland
y
• Advocates accelerated implementation of the Pre Payment’s Low C
os
• Advocates accelerated implementation of the Pre-Payment Metering programme
W k l l ith t t d l t i th t id
st Energy P
• Works closely with state and voluntary agencies that provide advice support services
Ad t th ti h ki t t l ith
Provider
• Adopts a sympathetic approach, working out payment plans with customers experiencing difficulty
P i i i h G F E Aff d bili
10thN
ov 200
• Participates in the Government Forum on Energy Affordability
• Contributed €2.4m to the Home Energy Saving Scheme
www.bordgaisenergysupply.ie21
08
Ireland Natural gas - still the most cost effective fuel’s Low C
os
Natural gas - still the most cost effective fuel
Also:Cl b i i t ll f i dl
st Energy P
– Clean burning, environmentally friendly, energy source• 30% & 50% less carbon emissions compared to oil and coal respectively
– Convenient – piped underground – no storage requiredProvider
p p g g q
– Payment in arrears
– Online Account Management
10thN
ov 200
– Charges can be smoothed over the year [Winter Saver Tariff]
www.bordgaisenergysupply.ie22
08
Irelandd’s Low C
os Thank You!st Energy P
Thank You!
Provider
10th Nov 08
