A year is a very long time in energy. A year ago, the world was focused on tackling the climate crisis and we at SSE Airtricity were hosting an exciting event in Belfast with the Taoiseach, Tánaiste, and the then First Minister and deputy First Minister of the Northern Ireland Executive to discuss their plans to decarbonise Ireland and Northern Ireland. Shortly afterwards the world gathered in Glasgow to commit to making more headway towards tackling climate change.
By Christmas, increasing Asian demand post-Covid was already causing wholesale gas prices to rise, before the Russian invasion of Ukraine sent global commodity markets rising exponentially. Since then, we have seen other events compound this further, such as the shutting down of nuclear plants in France which has caused electricity prices to rise in northwest Europe. In fact, over the last 18 months we have seen wholesale gas prices increasing over 1,000% resulting in increased costs for households and businesses.
Ireland is dependent on international markets for our energy needs. We import the majority of our gas and are connected to mainland Europe for electricity via the UK, so we have felt the impact of volatility here. The nature of electricity markets means that all suppliers, regardless of their energy mix (whether renewables or fossil fuels), are exposed to rising wholesale prices. When this volatility is sustained over long periods, prices for gas and electricity, unfortunately, need to be increased.
These complex challenges pose difficult questions and at SSE Airtricity we have done our level best to protect our customers in these difficult times. We have frozen our prices for financially vulnerable customers from June 2022 until the end of March 2023 and launched a 25-million-euro customer support fund across the island of Ireland; providing a range of financial supports including home energy efficiency upgrades, direct funding and charitable donations provided as direct assistance to vulnerable households regardless of their energy providers.
This volatile energy environment has created hugely challenging circumstances for all energy market participants with spiralling costs, increased trading costs and fast-moving variations in demand and input costs to deal with. However, despite this context, in acknowledgement of the severe difficulties that the energy crisis will create for our customers, we have gone further in our commitments. I can confirm that as a responsible energy company we have taken the decision to keep bills as low as we can and, correspondingly, we do not expect to record a profit within our SSE Airtricity business this financial year; even accounting for any additional returns from Airtricity renewable contracts resulting from the higher commodity prices. Whilst this will not shield everyone from market volatility, we are doing everything we can to support our customers at this time and there is certainly no windfall for SSE Airtricity.
We also wholeheartedly support the recent efforts from governments to help households and businesses in both Ireland and Northern Ireland. Energy companies can only do so much so it is through partnership that governments and energy companies can work together to help customers through these trying times.
If social distancing helped protect people during the pandemic, it was the vaccine programme that got us out of it. Similarly, these short-term measures will help manage the energy crisis, but it is clean electricity infrastructure that will get us out of it. We need to build our way out of this energy crisis. Indeed, if we had more offshore wind, more renewables, more hydrogen, more batteries and other clean technologies, and greater uptake of energy efficiency measures, there would be nothing Russia or any other actor could do to disrupt our energy supplies and distort our markets.
That is why over the coming months we need to accelerate the delivery of offshore wind, hydrogen, energy efficiency rollout for homes and businesses and other clean technologies. It is this multi-track approach, supporting customers in the short-term, and with industry and government working together for the medium-term that will lead to a secure, clean and affordable energy system for all. At SSE we have committed that if we do make any additional profits across the wider group above what were reasonably expected before the Russian invasion of Ukraine, we will invest that it in delivering the sustainable energy solutions for a better future.
Energy Customer Solutions, Ireland and Great Britain