The cornerstone of human existence since its inception has been energy. The primacy of a fresh technology, as per the convictions of economists, has consistently offered a competitive edge. Our ancestral hunter-gatherer reliance on the pivotal technology of fire, certifies humanity as the sole creature to have harnished it, providing an evolutionary upper hand. The power vested in fire precipitated the eventual planetary dominance of mankind. The preceding 400,000-year epoch in human chronicle, designated the era of fire, is referred to by ancient history scholars and anthropologists.
Fire sculpted us as a species, making us a “pyrophyte”, as described by anthropologist James Scott. It provided us with warmth, opening up otherwise inhospitable landscapes. Besides, it enabled us to cook and the act of cooking unleashed energy, diversifying our dietary range. The hardness of nuts was reduced by fire, leading to the evolution of our jaw sizes, as there was no requirement for robust jaw muscles— fire performed the prerequisite pre-digestion for us. Consequently, we developed smaller stomachs and more prominent brains.
Moreover, fire was instrumental in our social metamorphosis. It was around the fireplace where language was born. Engaging in conversations opened up space for deep pondering about the genesis of the universe, fabricating myths and eventually religious notions. More than anything else, fire propelled our social connect, as our wandering forefathers frequently relocated, with each location grounded by a shared fire.
Given that fire, by modifying molecular structure, expels energy, the profound bond between this fantastic technology and humans has spanned millennia. Very recently, a significant portion of the industrial revolution revolved around humans discovering several new combustible resources, thereby procuring heat to alter molecular structures of various substances, leading to the advent of modern chemistry.
It is essential that Ireland draws inspiration from Denmark, another small country devoid of any indigenous fossil fuels and a comparatively/unfavourably cold, damp climate where affordable energy is in demand by families.
Energy costs are crucial, affecting not only the economy, but also impacting human society. A consensus is shared amongst those of varying political ideologies, be it conservative or liberal, about the significance of energy pricing. The left view costly energy as leading to considerable societal repercussions, illustrated by the simple act of drying clothes. In earlier times, households welcomed a dry, breezy day to dry clothes, a cultural truth. In the damp weather of today, escalating energy costs are such that for a disadvantaged family, operating a tumble dryer is an unaffordable luxury. As garments stay damp and children fall ill, it becomes clear how the societal cost of energy can be detrimental. For those on the left, decreasing energy costs are socially crucial.
For the business-minded conservatives, energy is the vibrant lifeblood of commerce, constituting a major operational expense. Countries suffering from elevated energy costs risk losing competitiveness. High energy prices act akin to a commercial tax. Additionally, countries seeking inward investment will experience significant effects on their appeal relative to other nations based on energy price comparisons.
This leads us to consider Ireland’s current energy pricing situation. As of the end 2023, Ireland was categorised amongst the European Union countries with the steepest electricity tariffs, averaging roughly €0.44 per kWh, a figure nearly twice the EU mean of €0.22 per kWh. Consequently, the typical annual electricity expenses for an Irish urban living household with a standard 24-hour meter amounts to nearly €1,374. As indicated by Selectra, a comparator service, Irish electricity prices have nearly tripled in the last twelve years, a result of the country’s strategic decisions. To draw a comparison, Nordic nations having similar income levels as Ireland, expend only half as much on energy.
The primary reason attributed to this discrepancy is due to Ireland’s casual approach to energy, preferring to import gas from abroad rather than investing in local renewable sources. Conversely, countries like Denmark enjoy significantly lower electricity rates due to substantial investments in renewables. Regrettably, over one-third (34.2%) of Ireland’s electricity is powered by natural gas, and the fluctuation in gas prices naturally impacts the country’s energy tariffs.
The conflict in Ukraine has served to inflate gas prices, with Irish homes charged approximately 14 cents for each kWh, resulting in yearly gas bills of around €1,258. This is roughly 1.5 times the average European Union rate of 9 cents per kWh. Thus, Ireland is amongst the priciest countries in the bloc, witnessing a 70% cost increase since 2020. It’s crucial to acknowledge the government’s part in these steep energy costs, with taxes and levies comprising 20-25% of the typical household energy bill.
Despite abundant wind and wave resources, Ireland primarily depends on external energy imports. In 2023, these imports fulfilled nearly 80% of the country’s energy requirements. For comparison, Germany, another nation grappling with elevated energy prices, relied on imported energy for about 63% of its needs, predominantly sourcing natural gas from Russia before seeking other sources post-Ukraine conflict. Conversely, France is less reliant on imports owing to its sizeable nuclear power generation, with imports making up only 45% of its energy consumption. About 70% of its electricity originates from nuclear power. This internal energy production has effectively insulated France from fluctuating global energy prices in recent years compared to its neighbours.
Denmark, a pioneer in renewable energy, relied on foreign sources for roughly 45% of its energy requirement in 2022 – just about half of Ireland’s dependence. Over 50% of Denmark’s power came from wind energy, greatly reducing its reliance on imported fossil fuels.
Recognising the hardship experienced by numerous families, Budget 2025 brings a wave of subsidies, grants and assistance for the “average” people. A special €170 million energy subsidy programme aims to provide approximately €4,000 in assistance to around 39,000 businesses in the hospitality and retail sectors. Residential homes can look forward to a total of €250 in electricity credits, distributed over two payments this year and the following. Those entitled to benefits will also receive a €300 lump-sum fuel allowance in November.
It is imperative to acknowledge that the government seems to be tackling the effects rather than the underlying issues. How would the situation unfold if we didn’t possess the funds acquired from multinational corporate tax to divert from our critical lack of energy, and instead were dishing out subsidies?
It is essential for Ireland to adopt a model similar to that of Denmark, an equivalent small nation devoid of domestic fossil fuels. It has a chilly, moist climate necessitating affordable energy for households. This entails promptly migrating towards local renewable energy resources such as wind, wave, and indeed, solar power. This transition encompasses not only the climate implications of renewable energy, but also the pressing concerns of national security in a dispute-ridden global context. It also proposes an economic relief to lesser affluent families and ultimately addresses the paramount economic obligation of price competitiveness.
Human history is significantly intertwined with the story of energy. Relying on external sources for our energy needs is not a long-term solution, especially when domestic alternatives present an opportunity to substantially cut down the cost of electricity. Several nations have successfully accomplished this transition. So, the question arises, why can’t Ireland?