Taoiseach calls for further energy price reductions as Electric Ireland cuts rates

Taoiseach Leo Varadkar has called on energy companies to further reduce their prices after the State’s largest domestic provider announced it would be cutting its electricty and gas rates by 10 and 12 per cent respectively.

Electric Ireland on Thursday said the change was “in line with wholesale energy market reductions” and would come into effect at the start of November. The company said the decreases – in both the unit rate and standing charge – would equate to a saving of €17.67 per month on the average electricity bill and €18.06 per month on the average gas bill.

The move will save residential electricity customers an average of €212 over the course of a year while gas customers will save an average of €217 on annual bills with dual fuel customers set to see an annual reduction of €429.

Electric Ireland executive director Pat Fenlon said the company was aware that the last two years “have been particularly hard for our customers, given the impact of much higher energy prices following the Russian invasion of Ukraine”.

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He said that while “unprecedented international wholesale prices have fallen in recent months, Electric Ireland’s customers were not exposed to the extremes of these prices as a result of hedging strategies” and pointed out that “wholesale gas prices remain around 300 per cent higher than they were in 2020 which is continuing to impact customer bills”.

While the price decrease will be welcomed by customers, energy bills will remain significantly higher than before the cost of living crisis began and a cycle of increases saw domestic gas and electricity bills double for most households.

The price reduction comes less than a week after Energia announced a price cut of up to 20 per cent for its dual fuel customers. Electric Ireland’s move is likely to ramp up the pressure on other providers to follow suit in the days ahead.

Energy companies have remained tight-lipped about their plans when contacted by The Irish Times in recent days, saying only that prices would be kept “under review” with discounts and tariff reductions passed on when possible.

The average wholesale price of electricity in Ireland per megawatt-hour during August was €106.46, down 72 per cent from €387.63 in August of last year.

Mr Varadkar told RTÉ's News at One that the decisions by Electric Ireland and other providers to reduce prices were welcome “but I don’t think it is going to be enough”. He said he planned to meet energy firms in the coming weeks and put to them his view “that there should be further reductions over the next few months” if wholesale prices continue to fall.

He said a windfall tax on the high profits of energy companies would give the Government “some scope to do things in the winter time to help householders with their bills”. He added: “That will be done in both a universal and targeted manner.”

Daragh Cassidy of price comparison and switching site bonkers.ie said Electric Ireland’s announcement was “another sign of some normality returning to the energy market”. He commended the supplier for reducing its standing charge.

“These were increased hugely by all suppliers during the crisis. No one can avoid them, no matter how little energy they use, so it’s good to see Electric Ireland begin to reverse some of the previous hikes,” he said. “However, even after today’s reduction, Electric Ireland’s prices remain around double what they were in 2020 before Covid and then the war in Ukraine wreaked havoc with energy prices.”

While prices are falling, Mr Cassidy they were coming from “from really high levels” and that it would be another “very expensive winter” when it comes to heating homes. He said “the peak” of the energy crisis seems to have passed, “but we’re still a long, long way from a return to normality”.

Meanwhile, strong winds last month saw Irish wind energy generation hit a record high for August, rising 71 per cent year on year, according to a report from Wind Energy Ireland. Irish wind farms have provided 32 per cent of the island’s electricity over the first eight months of the year.

Prices on days with the most wind power saw the average cost of a megawatt-hour of electricity decrease by 5 per cent to €88.34 when compared with July, rising to €123.07 on days when the grid relied almost entirely on fossil fuels to produce electricity.