Electricity Prices in Ireland: Are They Finally Going Down?

Ireland has the most expensive electricity prices in Europe! In our electricity prices guide, we’ll walk you through the reasons for the high prices and why Ireland’s are the most expensive in Europe!

Looking for the cheapest electricity price? Check out our full and comprehensive guide on the cheapest electricity prices in Ireland. We walk you through all the latest prices across the entire electricity market so you can compare!

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Are Ireland’s Electricity Prices the Most Expensive in Europe?

According to the latest Eurostat figures, Ireland’s electricity prices by the end of 2023 were the highest in Europe. Irish electricity customers were paying an average price of €0.4511/kWh, almost 100% more expensive than the EU average at €0.2335/kWh!

Among the cheapest, Poland currently has the lowest price at €0.0910/kWh with Hungary's prices slightly higher at €0.0913/kWh. According to this data, the Irish are currently paying over four times more for their electricity than the Polish!

Here’s a break down of the EU 27 nations according to their electricity prices:

Source: Eurostat
Last Updated: March 2024

Have Electricity Prices Increased in Ireland?

Compared to the previous year in 2022, electricity prices in Ireland have increased by 21% from €0.3718/kWh to €0.4511/kWh. Over the past 12 years, electricity prices in Ireland have almost tripled.

In the following table, we break down the electricity price in Ireland over the past 12 years in five-year increments. We also calculate the estimated average spend on electricity based on these prices. Calculations are based on an average consumption of 4,200 kWh of electricity per year. All taxes, levies, and VAT have been included:

Source: Eurostat
Last Updated: 17/05/2023

Source: Eurostat
Last Updated: 17/05/2023

While just a few cents difference might not seem much of a price difference, it can still make quite an impact when it comes to how much you spend over the course of a year on electricity. As you can see from the table above, Irish customers are paying almost triple more than they were 12 years ago! Hopefully in the near future, a lot of this will be offset by the completion of the Celtic Interconnector Project which will diversify Ireland’s energy acquisition options.

Are Electricity Prices in Ireland Going Down in 2023?

Since the beginning of 2023, European gas prices have been steadily falling and, although they haven't fallen below crisis levels, they are currently the lowest they have been since 2021, which is €36/mWh at the time of writing. There have been a number of reasons for the fall in prices, but the majority of the decline can be attributed to both lower demand and more gas suppliers entering the market.

When Will I See the Lower Electricity Prices on My Bills?

Although gas prices have been declining, because of the way suppliers purchase energy, we're unlikely to see this decline on our bills for a while. Most energy suppliers will buy their gas 6 months in advance and usually pay a higher predicted price for the gas than in the moment. Due to this, it takes a little while for the retail gas prices to come down since suppliers still need to be compensated for buying high. That being said, Pinergy has become the first Irish supplier to already slash their prices and more are due to follow suit.

Why Did Electricity Prices Increase?

2021 saw a rapid rise of electricity prices in Ireland and indeed the rest of the world. This was due to many unprecedented events that have been occurring since 2020 and the post-pandemic uncertainty has pushed electricity prices up and up. This was mostly caused by the astronomical increase in the wholesale price of gas and there are many factors that have contributed.

The COVID-19 Pandemic

When COIVD-19 hit Europe and Ireland, supply chains across all sectors and industries experienced disruption. This disruption was due to national lockdowns, tighter border controls, and social distancing rules that made it more difficult for suppliers to get goods and services to where they needed to go. As a consequence, this led to rising inflation and the price of gas increasing rapidly.

A Cold Winter in 2020

In 2020, Europe experienced a particularly cold winter that meant an increased demand for gas to heat home. Usually, Europe keeps reserves of gas stored up for such events so that customers can have gas supplied to their homes, and that prices remain relatively stable.

However, Europe did not sufficiently restock these shortage facilities during the summer, and we're left with a shortage of gas for the winter months of 2021. As a result, the shortage has made us more reliant on imports from Russia.

The War in Ukraine

The war in Ukraine has had a significant impact on the gas price throughout the whole of Europe. The energy crisis began originally with the problems over gas supplies from Russia-owned Gazprom to Europe in the dispute over the Nord Stream 2 pipeline. Gazprom lowered the supplies causing an artificial shortage of gas in Europe leading to a price increase.

When Russia invaded Ukraine in February 2022, the gas price shot up and problems with supply continued to lead to an increase. The war has also impacted the electricity price in Ireland in other ways such as the Russian capture of the Zaporizhzhya nuclear power station at the beginning of war. As Europe’s largest nuclear power provider, producing enough electricity for approximately 4 million homes.

With these vital electricity sources being out of commission, it creates an increase in energy demand in Europe once again as we saw in 2021.

Is Ireland dependent on Russian gas? Ireland has a very small amount of Russian gas in its fuel mix and shares its gas network as part of the wider UK gas infrastructure which also has a very low dependency on Russian gas. However, all gas in Europe competes on a supply and demand basis meaning that the price of one type of gas will affect the overall price of gas as a whole. So even if Ireland has a small amount of Russian gas, it still uses a lot of gas in its fuel mix and will be impacted.

Why Do Gas Prices Affect Electricity Prices in Ireland?

It seems odd that two different sources of energy would affect the overall electricity price in Ireland, however the reason is down to a pricing mechanism called marginal pricing. This is essential for understanding the energy market.

What marginal pricing means is that the price of electricity is always priced to the most expensive energy source that is needed to satisfy the demand. For example, if the demand is low and renewables are sufficient, then the price of electricity is also low. However, if the demand is high then more expensive sources are needed to satisfy demand and therefore the price is set at that more expensive price.

Currently demand is very high and we are reliant on gas-fired power stations in order to satisfy demand. As well as this, the price of gas is currently the most expensive since natural gas is also competing against itself in different markets. Therefore this also sets the price for the rest of the electricity market. Here’s a graph to show how marginal pricing works:

In Ireland, despite all of the government’s best efforts to increase renewable energy sources like solar panels and wind energy (such as with solar panel grants), according to the latest Commission for Regulation of Utilities (CRU) statistics, 33.6% of the electricity produced in Ireland is from natural gas.

Consequently, any change in the price of gas in Europe will have a direct impact on the cost of electricity in Ireland. See the chart below to see the latest statistics on electricity sources in Ireland with the CRU all-island mix report:

Source: CRU Fuel Mix Disclosure and Carbon Emissions Report 2021, pg. 16
Last Updated: 17/05/2023

What Is the Cost of Electricity in Ireland?

In October 2023, electricity suppliers announced that they would be reducing their rates. Almost all electricity providers have announced price cuts or discounts, with Energia's being the largest discount at 31%. The current tariffs, along with the average electricity bill, are listed here:

*Figures are for illustrative purposes only. Calculations based on average consumption figures for an urban home with a 24-hour standard meter unless specified. All discounts and cashback have been applied. This also includes the PSO Levy at €0.00.
Last updated: April 2024

How Bad Has the Energy Crisis Affected Ireland?

The energy crisis in Ireland has been less dramatic than in other countries but having the fourth most expensive electricity prices has made things very difficult for both suppliers and consumers alike. However, unlike the energy crisis in the UK which has led to the complete freeze of its retail market, the Irish energy market still functions more or less as it has before albeit with higher prices.

Have Electricity Prices Led To Supplier Collapses in Ireland?

The impact of the electricity prices in Ireland on energy suppliers has been relatively mild compared to countries like Germany and the UK. In fact, despite some real struggles, no Irish energy supplier has gone bust due to the crisis and no company has filed for bankruptcy.

However, that being said, there have been a handful of suppliers that have decided to withdraw from the Irish energy market due to the rise in costs and some have decided not to take on any new customers:

1. Bright Energy
   In January 2022, Bright Energy pulled out of the energy market and their customers were transferred to a new supplier.
2. Ecopower
   In March 2022, Ecopower announced that they were no longer taking on any more new customers.
3. Glowpower
   In May 2022, Glowpower stopped accepting new customers due to the energy crisis and rising costs.
4. Iberdrola
   In June 2022, Iberdrola pulled out of the Irish energy market due to the rising costs. It remains the biggest supplier to have left the Irish energy market.
5. Panda Power
   In September 2022, Panda Power shut down its energy operations and its customer base will be transferred to new suppliers soon. Despite pulling out of the energy market, Panda still provides its waste collection service.

What Happens When an Electricity Supplier Leaves the Market?

When an electricity supplier in Ireland leaves the energy market, its customer base is transferred to a Supplier of Last Resort (SoLR). The SoLR process is overseen by the CRU who regulates the energy market. Customers are transferred to their designated SoLR during a window of less than a month after which they cannot switch for another 3 months. There are two SoLRs for the Irish energy market: Electric Ireland takes on all electricity customers and Bord Gáis takes on all gas customers.

My Electricity Has Gone Up. What’s Being Done About It?

With the way the energy regulation is set in Ireland, there is unfortunately little that can be done if your cost of electricity has gone up. Unlike our UK neighbours who can contract a fixed price for the electricity, people in Ireland don’t have that luxury. Irish customers are therefore left vulnerable to the volatility of the wholesale market and will see their bills fluctuate.

These fluctuations are likely to last until the war and instability in Ukraine, electricity and gas prices are likely to increase, however there have been some interventions on both a national and a European level to help ease the worst effects of the crisis.

What Has the Irish Government Done About Electricity Prices?

The government has already taken action in two ways. In February, the government announced that they would offer a credit voucher of €200 for all domestic energy customers in order to reduce the effects of the price rises. The final payments for the credit voucher were made in March 2023.

In addition to the voucher, the government has also committed to increasing the quantity of SEAI Grants. All these efforts to help soften the blow that the cost of electricity has had on Irish consumers’ bank accounts.

The government has also decided to lower the PSO levy and give a reimbursement of €97.12 to all domestic households and has also lowered the VAT on fossil fuels from the standard rate of 23% to the reduced rate at 13.5%. This is to help net out the Carbon Tax from its current high of €41 per tonne of CO2. Both these initiatives will start from October 2022.

What Is the European Union Doing To Solve the Energy Crisis?

Up until recently, the European Union has left the management of the energy crisis to the Member States with limited intervention on a European level. However, since Gazprom’s decision to shut down its flow of gas via the Nord Stream 1 pipelines, the EU has planned a significant emergency intervention into the European electricity markets:

1. Toolbox for Rising Energy Prices
   Announced as the crisis was starting, the EU outlined a number of fiscal and regulatory measures each individual Member State could take against the crisis. These options included: reducing taxation, helping energy companies manage the high costs, and providing support for vulnerable people.
2. RePowerEU Initiative
   The RePowerEU initiative was announced to push Europe to diversify its fuel mix by moving away from Russian gas and also to accelerate the development of renewable technologies.
3. Gas Storage Regulation
   This was put in place to ensure that Member States have enough gas and do not experience a shortage like in 2021. All Member States are required to top up their gas storages by at least 80%.
4. Inframarginal Revenue Cap
   This is to prevent the gas price from influencing the electricity prices too much in Europe. Those producers of cheaper energy sources will have a revenue cap of €180/mWh so that any excess profits will be reinvested into reducing the gas price.
5. Solidarity Contribution
   This is a one-off windfall tax on all the fossil fuel sectors who have benefited enormously from the crisis. This tax will go to fund the development of renewable energy and to reduce bills.

What Can I Do About the Electricity Prices in Ireland?

Consumers can also take action to reduce their electricity bills on an individual basis. Even small changes in your energy habits will help keep your costs low and make your cost of living a lot easier. The first things customers can do is to ensure the following:

• Check Your Provider
  Ensure you are with a reputable provider with a fair cost of electricity
• Check Your Prices
  See our average cost of electricity guide to compare your utility bills to the average home to have an idea of what is a fair cost.
• See the Latest Offers
  Visit our cheapest electricity in Ireland guide to see the latest offers
• Reduce Your Consumption
  Implement some of our 101 tips to reduce your electricity consumption.

If you have a bigger budget and would prefer to have a larger impact on your energy consumption, you should explore the following suggestions:

• Install a smart thermostat
• Upgrade your windows and doors
• Insulate your attic and cavity walls
• Consider selling renewable energy
• Replace your boiler

If any of these large renovation projects interest you, be sure to look at the latest SEAI Grants for ideas on what you can do this year to lower your energy use. Every little action will count in helping you survive as the cost of electricity in Ireland continues to spiral out of control.