Fresh data reveals that Irish consumers are typically paying over €500 more for their energy bills compared to most countries in the EU, with the cost of electricity alone being about €350 higher. Recent statistics from Eurostat, the EU’s statistical body, rank Ireland second in the EU for the highest electricity prices, almost 30% above the average, and behind only Germany.
Yet, before taxes, Ireland’s electricity prices are the most expensive in the EU. This discrepancy arises from Ireland’s 9% VAT rate, compared to the 20% rate prevalent in many other EU nations. Furthermore, Ireland has the EU’s fifth highest gas prices; over 15% above the average, resulting in an additional burden of €183 a year for Irish households.
Daragh Cassidy, from the price comparison and switching platform bonkers.ie, wasn’t surprised by these numbers and pointed out the reasons behind this trend, stating, “Irish residents have been burdened with well-above-average EU electricity prices for some time.” He attributed this to Ireland’s relatively small, scattered population, the recent population surge, and an increase in data centres exerting pressure on the grid.
To address the increasing demand-supply gap in electricity, Cassidy noted that in recent years, Ireland had to turn to the expensive, high-emission emergency gas generation, a strategy that is less common in countries relying heavily on cheaper hydro and nuclear power sources. He also mentioned that many Irish power plants are older and smaller, leading to less operational efficiency and hence higher costs.
Nevertheless, Cassidy is hopeful about a change in the mid-term future with the construction of a power link with France. Expected to be operational in 2027, this would allow Ireland to access the generally cheaper electricity in France.
While there has been a significant decrease in the cost of energy in Ireland over the past year, the prices are noticeably higher than those prior to the 2022 Russian invasion of Ukraine. The annual expenses have increased by around €1,000 compared to four years ago. Mr Cassidy suggested methods of cost reduction, revealing that significant first-year discounts are available to those switching suppliers. This could potentially lower prices in line with those in Latvia and beneath the EU average. Attractive discounts exceeding 20% off standard rates are often offered to new customers in Ireland which makes lower-than-average costs feasible. However, more than a million Irish homes do not consistently seek the most economical options. Mr Cassidy also emphasised that even those reluctant to change suppliers could make savings. Provided they have smart meters, they could synchronise their highest energy consumption with the cheapest times.