Households are to be told they must pay an extra €26 on average on their annual electricity bills to ensure the lights are kept on this winter.
The Commission for the Regulation of Utilities (CRU) said the significant risks to the country's electricity supply means it must "act quickly".
While it will hold a two-week public consultation, it will introduce changes to tariffs from October 1.
The CRU says the network requires €478m to secure supply in 2023. The tariff changes are intended to cover €100m of that.
It insists what is proposing mean that “extra-large energy users” such as data centres and other industries face a higher increase to their bills.
It also says households would have faced up to a €43 increase in their bills if the other tariff changes were not introduced.
Households are already paying an average of €900 more a year for their electricity and €800 more for their gas than they were at the start of 2021.
The CRU proposes:
- A peak differential for all customers for 2022/23. CRU said it has required providers to develop peak network tariffs to be levied between 5pm and 7pm each day, which it anticipates will lead to a reduction in demand at the “critical peak period”;
- An increasing block tariff for high-energy users, where users that ramp up their demand significantly will face specific higher tariffs to match;
- A system alert tariff, to also apply to large energy users, to apply to those who are inflexible and do not reduce demand when the system is under stress;
- A “decarbonisation” tariff aimed to incentivise a reduction in demand at times when the electricity system has a greater reliance on fossil fuels. Large energy users who are “inflexible” and do not move their demand during such times will face this tariff.
The country's electricity demand is expected to increase by 13% between 2021 and 2025 but more than half of that rise (62%) is set to come from a small number of “extra-large energy users” such as data centres.
CRU said that the risks to Ireland’s energy system are not directly caused by any one sector, but the “significant demand growth” from extra-large energy users such as data centres is a “significant contributing factor”.
Paul Deane, research fellow at UCC’s MaREI Research Centre for Energy, Climate and Marine, said this intervention from the regulator points to the seriousness of the situation Ireland is facing in terms of energy security heading into the winter.
“The consequence of any interruption of electricity supply would be catastrophic,” he said. “This is sending the correct signals to the correct areas of the market, the areas putting the most stress on the system, and targeting them for these financial measures.
“It puts the financial measures on those with the most responsibility for driving all these challenges. But we’ll have to wait and see the impact on data centres. Will the tariffs they’re charging incentivise them to change their behaviour enough?”
On the back of this latest increase, Age Action intensified its calls for an increase of €23 to the State pension in Budget 2023 to protect people from poverty.
Celine Clarke, head of advocacy and communications with Age Action, said that people’s pensions are fast losing purchasing power and this latest price hike is yet another blow to vulnerable households.
“For older people who depend on the State pension, they’re on a fixed income, they have no way of making up any additional money," she said. "At this point in the year, their income spending power has already been eroded due to rising costs of inflation. A lot of that is linked to energy.
“So a further energy increase us going to cause a lot of people a lot of worry.”