Higher price energy costing Irish consumers almost €500 more than EU average each year
Irish consumers pay almost 30 per cent more than the EU average for electricity while the cost of domestic gas is almost 10 per cent higher with the cumulative impact costing Irish households close to €500 a year, new figures suggest.
According to the data from Eurostat, the EU's statistical agency, electricity prices in Ireland are the third most expensive in the EU and almost 30 per cent above the average, with only Germans and Danes paying more to heat and light their homes.
The net price of electricity before VAT and other taxes are applied sees Ireland leapfrog those two countries because the VAT rate here currently stands at 9 per cent compared to the rate of around 20 per cent which is attached to electricity in other EU countries.
The impact of the higher prices means Irish households are paying around €350 more per year for their electricity compared to other EU countries.
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Gas prices are also elevated although not to the same extent, the Eurostat figures show.
Ireland is the sixth most expensive country in the EU for domestic gas with prices nearly 10 per cent above the EU average.
The financial impact of that sees Irish households paying around €125 more per year for their gas compared to other EU countries.
'Irish households have been paying electricity prices that are well above the EU average for years so these latest figures from Eurostat aren't surprising unfortunately,' said Daragh Cassidy of price comparison and switching website bonkers.ie.
He described the reasons for the higher prices as 'complex' and pointed to a 'relatively small and dispersed population with too much one-off housing.'
He said the 'costs for the upkeep of our electricity network are very high on a per capita basis [and the] rapid growth of the population and the increase in the number of data centres in recent years also hasn't helped. This is putting pressure on the grid.'
He noted that in recent years Ireland has had to procure high cost, high emission, emergency gas generation to plug the gap between electricity demand and supply.
'Many of our power plants are also older and smaller than those in other countries so we don't benefit from efficiencies and economies of scale as much,' Mr Cassidy continued.
'We also have a weakly connected grid. We're quite isolated so we can't import a huge amount of cheaper electricity from abroad. Though the interconnector we're building with France will hopefully improve things when it comes online in 2027 as it will allow us to tap into generally cheaper French electricity.'
He downplayed the impact of an increased supply of wind generated power on prices at least in the short to medium term.
'Wind is far cleaner for the environment and will help us meet our climate change targets and avoid hefty EU fines which is positive. But the price we're paying most wind farms for the electricity they generate is around €90 to €100 per MWh, which is not far off the prices we're already paying now.'
He reminded households that there were still easy ways to save money.
'Anyone who switches electricity provider could get a discounted rate as low as 24 or 25c per kWh for a year. This would put prices on a par with those in Spain and be below the EU average. It's similar for gas. And if you have a smart meter that you have activated – see if you can move your electricity use to times when it's less expensive.'
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