People in the Republic pay more for electricity than many other Europeans, according to experts who partly blame dependence on natural gas and rising network charges for high energy costs.
The average Irish family pays €1,700 a-year for electricity, although costs here were the highest in Europe in 2024, excluding taxes and levies, said the Economic and Social Research Institute (ESRI) in a new study of Irish energy bills.
The Republic had the eighth-highest electricity bills in Europe in 2024 when taxes and levies were included. But Government supports, including a €100 a month credit during winter and a VAT cut, meant the State dropped to 15th place overall.
Natural gas prices, which have remained high since Russia’s invasion of Ukraine in 2022, heavily influence electricity prices as many countries use the fuel to generate power.
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“Irish electricity prices are particularly exposed, with approximately 50 per cent of Irish electricity generated using natural gas,” noted the ESRI report: A descriptive comparison of Irish and European electricity prices: 2018-2024.
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The ESRI published its report as industry lobby group, Wind Energy Ireland, calculated that wholesale prices for electricity hit €179.10 a megawatt hour (MW/h) during March, when global oil and gas prices soared following the attack on Iran by the United States and Israel.
That conflict closed the Strait of Hormuz, through which 20 per cent of the world’s oil is shipped, and hit liquefied natural gas production in the Gulf, driving up the cost of the fuel, which is key to electricity supplies.
The war followed a cold winter in Europe that left the region’s stores of natural gas lower than usual.
Wind Energy Ireland’s figures show that wholesale prices dipped to €94.20 (MW/h) on days when wind was most available.
Wind and other renewables increasingly act as a “hedge” against high wholesale prices, noted the ESRI.
This is due to the Renewable Energy Support Scheme, introduced in 2019, which requires wind farms and other green electricity suppliers to pay cash back to consumers when prices are high. Irish families received an €89 credit through this scheme in 2022/23.
ESRI researchers Brendan Wade, Niall Farrell, Muireann Lynch and Miguel Tovar Reaños also noted in the report that the cost of building emergency power plants to stave off winter shortages of electricity contributes to higher bills here.
National grid company EirGrid has four temporary power plants, fuelled by natural gas and diesel, in counties Dublin, Offaly and Clare to call on should electricity demand run too close to supplies.
The total cost of these and other emergency measures is €1.52 billion to date.
That has been added to the network charges that comprise part of all customers’ electricity bills since 2021, when industry overseer, the Commission for the Regulation of Utilities, took steps to tackle a squeeze on electricity supplies.
Network charges will increase between now and 2030 to fund expansion of the national electricity grid and local distribution networks, adding an estimated €59 to €106 a year to domestic bills, notes the report.
The report shows that the difference between wholesale and retail prices here was the highest in Europe in 2024, with wholesale at about €100MW/h and retail at €300MW/h.
However, Farrell cautioned that this was not necessarily “all profit”, as electricity suppliers could have faced other costs on top of wholesale prices.
They could have included an extra premium paid for risk hedging, a practice that cuts out price volatility for consumers, he said.
Farrell noted that this gap was particularly wide in 2022, following the outbreak of the Ukraine war, but narrowed again two years later as prices eased.
