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RTÉ News
06-07-2025
- Business
- RTÉ News
How high might electricity prices rise to again?
Irish consumers are used to paying more than their European counterparts for electricity. Recent figures from Eurostat show prices here are the third highest across the European Union - almost 30% more than the average for the 27 member states. This means Irish households are paying roughly €350 more per year for their electricity, with the average annual bill here coming in at around €1,800. There are a few notable reasons for this. In comparison with other EU countries, Ireland has a relatively dispersed population with a lot of one-off housing. This makes the cost of maintaining the grid comparatively higher on a per capita basis. While demand - notably from data centres - has grown substantially in recent years, putting increasing pressure on supply. And when demand does peak, importing low-cost electricity from abroad isn't straightforward, given we're on an island with a lack of interconnectivity. Add into the mix volatility in the supply and cost of energy brought about by wars in Ukraine and the Middle East, and Ireland's complicated path to lower-cost electricity is apparent. As a result, both ESB Networks and Eirgrid - the operators of the country's energy system - have spent huge sums on much-need grid improvements in recent years. But all of this comes at a significant cost, which is largely passed on to customers. Network tariffs or grid fees, make up almost a third of an electricity bill - so that is well over €500 yearly based on the average bill. €19 billion network investment would add up to €16 onto bills ESB Networks and Eirgrid are now proposing an investment of nearly €19 billion over the next five years (2026-2030) to maintain and upgrade their networks to meet current and future demand. Such an investment, if approved by the Commission for Regulation of Utilities (CRU), would add up to €16 to customers' electricity bills each year. ESB Networks outlined the acute need for such an investment this week at the Oireachtas Housing Committee. Nicholas Tarrant, CEO of ESB Networks, said the demand for electricity for new homes was twice what it was for houses built during the Celtic Tiger due to the installation of heat pumps and the use of electric vehicles. He said the organisation is seeing "a major increase in demands for connections to the network". However, the CRU (which approves network investment plans) is instead proposing an initial €14.1 billion grid investment between 2026 and 2030 that would see at least €6 added annually to bills. This figure could be increased to €18.08 billion based on ESB Networks and Eirgrid meeting annual delivery targets - which would see the €16 yearly increase come into play. A final decision will be made on this proposal later in the year, but one thing is for sure, household bills will rise. Commissioner at the CRU Fergal Mulligan said the cost to the consumer "will be assessed on a year-by-year basis" and that the level of increase will "depend on a number of factors, including the level of delivery by the network operators and how suppliers choose to recover network costs". The electricity suppliers can individually determine what level of these charges they either absorb or pass onto their customers. Daragh Cassidy from comparison site is hopeful households mightn't have to bear the full cost of this, pointing out that "if the wholesale cost of electricity, which makes up around half of the price we pay for our electricity, were to fall substantially this might cancel out any increase in grid fees over the coming months and years". Further network charges to come into effect later this year However, even if the amount added to bills from future grid investments (from 2026) is relatively low, later this year customers will still be hit by network charges from the current round of approved investment in the network (covering 2012-2025) - and they are expected to be rather substantial. Last year the CRU approved an increase of just over €100 in network charges on customers' bills annually. This year's grid-fee increase - to be determined in the coming months - isn't expected to be that high but will still add more financial pain to energy customers. Cutting back outgoings by avoiding these fees simply isn't an option, homes need electricity, so customers will need to be even more price-conscious to keep costs down. The CRU is encouraging customers to shop around and switch suppliers regularly to get the best deals and minimise the impact of any increase in charges. That's simple but effective advice. If you've been with the same energy provider - electricity and/or gas - for more than a year, the chances are you're paying more than you need to. Suppliers offer new customers the best rates, and it's important to accept this and be prepared to make the switch every year when you're contract is up. And this is a lot easier than many might think. "Everything can be done online in the space of a few minutes, you don't even need to contact your existing provider," Mr Cassidy said. The reality is we have a growing population, we're transitioning towards net-zero, and trying to build more resilience into energy systems. All of this needs to be paid for somehow, so incremental electricity bill rises (aside from those related directly to electricity prices) can be expected as we go further down this path.
Irish Independent
03-07-2025
- Business
- Irish Independent
Customer bills will rise to fund €18bn upgrade of Ireland's power grid, but there's confusion over how much hikes will be
There is confusion, however, over how much customer bills will rise to help fund the spending. The huge investment would pay for strengthening networks to cope with extreme events like Storm Éowyn and allow for the connection of tens of thousands of new homes and businesses. It would boost capacity for the expansion of electric vehicles and heat pumps and prepare the grid to carry power from planned offshore windfarms. It would cover the cost of 70 new or updated substations, 50,000 pole replacements, over 300km of underground cables and more than 1,000km of new or upgraded overhead lines. Network tariffs – part of the charges that make up customer bills – will rise to raise the funds but it is not clear by how much. The Commission for Regulation of Utilities (CRU), which proposes to sign off on the five-year plan, says it should only add between €6 and €16 to the average annual bill. However, ESB Networks which, with EirGrid, put the plan together, estimated that it would add €83 to an average annual bill. Full details of the five-year plan are to be published today and put out for public consultation for 10 weeks after which the CRU will make its final decision. However, the regulator has proposed allowing ESB Networks and EirGrid to go ahead with almost all the projects they submitted. The two bodies jointly sought approval for an €18.98bn spending plan for 2026-2030. The CRU has approved €14.1bn at the outset but says the figure can be increased to €18.1bn before 2030 so long as projects are being delivered as promised and on time. At the lower figure, the CRU says it has calculated the impact on customer bills to be around €6 per year, rising to €16 if the higher figure is reached. The spending plan, called Price Review 6 (PR6), is triple the spend of the last five years, and the CRU acknowledged it was a huge increase. It said Ireland was going through an unprecedented change in the use and demand for electricity, and significant investment was required to ensure the network was up to the task. 'The investment by ESBN and EirGrid in our energy infrastructure is crucial to ensure Ireland can accelerate its move to a cleaner and more secure supply of energy as we progress to 2030,' Fergal Mulligan, CRU commissioner, said. Mr Mulligan said costs to the consumer would be monitored annually. 'We realise that these significant investments may lead to increases in consumer bills in the short term,' Mr Mulligan said. 'Given the financial pressures that many households currently face, network companies must keep the cost of moving to cleaner energy as low as possible for customers.' The CRU said customers should shop around for the most suitable tariffs for their needs which could minimise the impact of any increased charges that suppliers may pass on to them.
RTÉ News
03-07-2025
- Business
- RTÉ News
Energy operators propose investment of up to €18.98bn to maintain networks
The operators of Ireland's energy system, ESB Networks and Eirgrid, have proposed an investment of up to €18.98 billion over the next five years to maintain and upgrade their networks to meet current and future demand. Such an investment, if approved by the Commission for Regulation of Utilities (CRU), would add up to €16 to customers' electricity bills each year from 2026. However, the CRU is proposing an initial €14.1 billion funding package across both companies over the five-year period (2026-2030) that would see at least €6 added annually to bills. This figure could be increased to €18.08 billion based on ESB Networks and Eirgrid meeting annual delivery targets. The CRU is now consulting with stakeholders on the regulatory and financial framework that will support these investments. It will make a final decision later this year, with the new investment plan and costs starting from January 2026. It published the details today as part of the Draft Determination on Price Review 6 (PR6), through which the CRU evaluates and approves the proposed investment plans submitted by the network companies to upgrade the electricity grid and associated infrastructure. The regulator said the proposed investment will deliver secure, reliable, and resilient networks and supplies, and empower customers through a more digital, flexible energy system with better customer services. PR6 deliverables will include the connection of housing, delivery of priority projects unlocking additional generation capacity, new offshore wind infrastructure capability, enabling delivery of electric vehicles, and the investment needed for a storm-resilient and smarter grid. The CRU said Ireland is going through "an unprecedented change in our use and demand for electricity and significant investment is required to ensure that Ireland has a high-quality network that supports the current growth in demand. "The network must also facilitate the move away from fossil fuels to cleaner energy and deliver a range of measures, such as microgeneration, electric vehicles, electrification of heat, and other services, that will provide a more sustainable use for our electricity network," it added. Commissioner at the CRU Fergal Mulligan said, "we realise that these significant investments may lead to increases in consumer bills in the short term and, given the financial pressures that many households currently face, network companies must keep the cost of moving to cleaner energy as low as possible for customers. "In terms of the cost to the consumer of this investment, it will be assessed on a year-by-year basis," he added. "But, as a guide, over the five years we expect the average annual increase to be between €6 and €16, however, this will depend on a number of factors, including the level of delivery by the network operators and how suppliers choose to recover network costs," he said. Daragh Cassidy from comparison site said the latest price review by the CRU "really underlines the scale of investment and work that's needed in our grid over the coming years. "The demands of a rapidly growing population, an increase in the number of data centres, the electrification of the wider economy, and the transition towards Net Zero all present various challenges, and of course costs - which have to be paid for somehow," he said. "A large part of our grid is also aging and many poles and wires need to be replaced or put underground. And this costs money too," he added. "While the potential €6 to €16 a year increase in household bills may not be welcomed by consumers, it's moderate in the overall scheme of things. "Bottlenecks in our electricity grid are now impacting on our housing delivery as well our ability to achieve our climate targets, which are among the biggest issues facing the country right now. So you could argue this is a price worth paying if it helps solve them," he added. "In the meantime, the current price review still has one year to run. In August the CRU will announce whether to increase grid fees for the 2025 to 2026 year. Last year it approved a hike that equated to an increase of just over €100 a year to consumers' bills, but it's expected to be much lower this year," he said. According to the CRU, the most recent Estimated Annual Bill (EAB) for electricity customers was €1,802 (as of April 2025), with network tariffs representing around 20-30% of that figure. Suppliers determine what level of these charges that they either absorb or pass onto their customers. Mr Cassidy added that "if the wholesale cost of electricity, which makes up around half of the price we pay for our electricity, were to fall substantially this might cancel out any increase in grid fees over the coming months and years. "So we may not necessarily see an increase in consumers' bills. And with electricity prices in Ireland still around 70 to 80% above where they were before the war in Ukraine broke out, you'd hope this is the case," he added.
