Irish households had highest electricity prices in Europe in 2024, new study finds

Commission for Regulation of Utilities predicts annual household bills may rise by €59–€106 by 2029-30.

Irish households faced the highest electricity prices in Europe in 2024, with interventions such as energy credits not even bringing us back to the EU average, a new study has found.

The Economic and Social Research Institute (ESRI) said consumers in Ireland can be at the whim of global gas markets when it comes to how much they pay for electricity, while annual household bills may rise between €59 and €106 by 2029/30 due to network tariffs.

“Irish electricity prices tend to track trends in natural gas prices,” ESRI associate research professor Dr Niall Farrell said.

While many countries have reduced their reliance on gas-fired generation in recent years, Ireland has been less able to diversify away from gas-fired generation. Renewables provide an important hedge against fuel price volatility.

Its paper examines trends in European and Irish household electricity prices between 2018 and 2024, with a particular focus on Ireland, but not looking at more recent trends.

When taxes and levies are excluded, Irish electricity prices ranked third highest in Europe in 2018, but had risen to the highest by 2024.

However, since the Russian invasion of Ukraine in 2022, the Government had intervened with measures such as VAT reductions and multiple rounds of energy credits to try to shield households from the rises.

When these supports were taken into account, Ireland had the eighth most expensive electricity prices in Europe in the second half of 2024.

When adjusting for the general cost of living, Irish average electricity prices moved from being the eighth to the fifteenth most expensive in Europe in 2024, according to the ESRI, which is close to the European average.

However, it urged caution with this finding, and said it should be considered carefully as electricity prices themselves shape living costs in a country, so adjusting for the general cost of living may not give the fullest picture of energy costs in an economy.

“Because Ireland generates a large share of its electricity from gas, changes in the international price of gas on wholesale markets may be an important factor behind higher electricity prices,” the ESRI said.

There are several takeaways for policymakers and regulators. The first is that Irish energy costs are higher than average and particularly exposed to the international price of natural gas. This has imposed a considerable additional cost on consumers.

“Overall, retail price increases in Ireland are large relative to wholesale energy and supply costs, and are notably greater than in many other markets.” 

While network costs have risen in recent years, these have been small relative to the impact of rising fuel prices.

Furthermore, future network investments will increase costs for consumers.

“While notable, the magnitude will be less than that experienced in recent times,” the ESRI said.

“The Commission for Regulation of Utilities predicts that annual household bills may rise by €59–€106 by 2029-30. The way in which network tariffs are recovered may require reform to incentivise efficient system development.” 

The paper also points to supports for renewable energy in Ireland, which are financed by the public service obligation (PSO) levy on electricity bills.

It said there had been lower PSO levy costs in recent years along with VAT reductions, which had reduced the burden for households.