- Thursday 27 April 2023
Author: Charlie Weston
The price of electricity in Ireland is the highest in Europe, according to new research that is likely to pile pressure on the Government for further relief to households.
The unit price for electricity is almost double the European average, according to the Household Energy Price Index, which was commissioned by the Austrian energy regulator and the Hungarian energy regulator.
Gas prices are also among the most expensive in Europe.
The cost of electricity has doubled for Irish households in the last two years.
The Household Energy Price Index calculates the supports per capita in Ireland at €1,071 since September 2021.
This figure includes three €200 energy credits, the last of which is due to be paid by the end of this month.
The major study of residential electricity prices carried out across European cities in February of this year found Ireland was the most expensive of 33 countries.
Its findings are likely to heap further pressure on the Government to provide at least the same supports again for the coming winter, just a week after a surplus of €10bn in the public finances was announced.
The countries assessed for electricity costs include European Union (EU) members, along with Britain and Ukraine.
The survey found residential electricity prices, including taxes, varied from 9.2c per kilowatt hour in Hungary to 49.9c in Ireland. The EU average was 28.3c.
Irish energy companies have not cut prices for households despite a sharp drop in wholesale costs. Recent Central Statistics Office figures show wholesale electricity prices dropped here by more than 50pc in the year to last month.
Energy suppliers claim “hedging” deals they have entered into to buy wholesale gas to generate electricity mean they are unable pass on lower wholesale costs to consumers.
The survey also shows the financial supports per capita for households and firms to help cope with the price rises are lower here than in other European countries.
Between September 2021 and January of this year, total support to households and firms on a per capita basis varied from €233 in Cyprus to €3,732 in Luxembourg.
Germany ranked second with per capita supports of €3,179.
The survey found residential gas prices in Ireland were the eighth most expensive of 28 countries studied.
The cost here in February for town gas was 16.1c per kilowatt hour. This compares with an average in the EU of 13.1c.
Daragh Cassidy said Ireland has had the highest electricity prices in Europe for years.
He said there needs to be an investigation into why this is the case.
“While the war has pushed up prices everywhere, prices here were already very high to begin with,” he said. “And we can’t blame taxation.”
He said the tax on energy in Ireland is below the EU average.
“Indeed, when you look at the net price of electricity, prices here are over 50pc above the EU average, according to Eurostat,” he said.
Some of the reasons cited for high energy costs here include our island location, our reliance on imported fossil fuels and our dispersed population.
“These are largely outside of our control. However, the Government needs to look at areas within its control such as planning and the operation of the ESB and Eirgrid, which it ultimately owns,” Mr Cassidy said.
Before deregulation of the energy market, Ireland had among the cheapest electricity prices in Europe.
This means something has gone wrong over the subsequent decades, Mr Cassidy said.
There was huge controversy in February when it emerged that the State’s biggest electricity supplier Electric Ireland was cutting its prices for businesses, but not for households.
Electric Ireland reduced some prices by up to 15pc for firms, but said it had no immediate plans to introduce reductions for consumers.
The average cost of electricity has risen to around €2,000 a year, with all suppliers implementing a succession of double-digit price hikes in the last two years.