Now, here's a statistic that you won't like to hear, the price of electricity in Ireland is the
highest in Europe or among the highest that's according to new research.
It's almost double the European average according to those statistics commissioned by
Austrian and Hungarian energy regulators. I'm with Christopher O'Sullivan and Louise
O'Reilly are still here with me. I'm also joined by Daragh Cassidy
of bonkers.ie and Muireann Lynch, Senior Research Officer at the ESRI.
You're both very welcome along to the program tonight.
Daragh break down those numbers that we saw today published in the Irish Independent about the
unit price for electricity. It's eye-watering and I said that you know, people might,
this might come as a surprise. It probably won't come as a
surprise to people who are getting bills. Yeah, anyone who's opened up an electricity
bill over the past few months or even a gas bill as well won't be surprised.
It's a really, really high number, but this isn't surprising. Eurostat releases these
figures every six months also and when Eurostat releases the figures it always
shows that we are around the second or the third most expensive in all of Europe for electricity.
It's 50 cents at the moment per kilowatt hour on average, that's up from around maybe 20
cents to 22 cents in Ireland back in 2020. So it's a big turnaround, but it compares to
an average of around 28 cents in Europe. So it means it's over 70% above
what it is in Europe. So that's a big amount.
And what that means for the average bill, the average household that would
be paying maybe close to €800-€900 extra a year. It's not an insignificant amount of money.
And of course, there's lots of countries not that dissimilar to Ireland included in those figures,
for example, Norway. Now mind you, they have a lot more renewables than we do.
They have a price of 14 cent to 15 cents. So that 50 cent figure is really, really high and
it's a big outlier. Yeah, incredibly high and when these discussions are had, I suppose,
especially now with politicians on, on the panel with us, they will say, you know, it's not just
us, it's being experienced right across Europe, it's the war, it's all sorts of things,
but our base price appears to be Muireann certainly much higher than other, you know,
before any of these other factors come into play, you have a very high for our unit price.
So what, why are we top of the pile? Why do we pay so much more than
our European neighbours? So I would say there are
things that we know and things that we don't know. We are still trying to get to the bottom of this
to some extent, there's new research that needs to be done, but there are lots of
factors that could be playing in here. Now some of them are things we can't do anything about.
So we can't do anything about the fact that we're an island,
we can't do anything about the fact that we only have two interconnectors to Great Britain.
We're getting another one to France but still has to be built.
We also can't really do anything about the fact that our population is so dispersed.
So that means that it just costs more on average to get electricity
to every single home and business around the country. We don't have as many densely populated cities.
We don't have as much as much apartment blocks and that kind of thing that are cheaper to service.
And then there are other things we probably could do something about in the longer term.
So that's that question, what's within our control?
So we're still very reliant on gas generation. So we're reliant on fossil fuels
in general for electricity. Some of that is not our fault
and that we've tapped all of our hydro resources. We don't have the kind of resources they have in
places like Switzerland, for example. But within those fossil fuels.
We're very reliant on gas. We don't have any nuclear,
we don't have much coal. Nuclear is a low carbon source, but,
coal is a very high carbon source. And then on top of that, our renewable
electricity seems to be coming in more expensive than other countries.
So the subsidies that we pay for renewable electricity are quite high considering how
windy we are. Some of that
and we've got some preliminary results to suggest that if you have long delays in the planning
system that all puts upward pressure on prices. So in order to get a renewable energy project
online, for example, let's say you wanted to build a wind turbine first,
you have to get planning permission. I have yet to speak to a wind developer
that got planning permission within the 18 weeks is targeted by An Bord Pleanála.
Then once you've got planning permission, you have to get a grid connection.
Then once you've got your grid connection, you have to go and apply for a subsidy and
these things all stack up so it can take years to get these things online.
If we could shorten that time frame, that would have a material impact on our bills
according to research we've done. Christopher to ask you about this, is the government
keen on investigating just why we are paying so much more than everyone else?
I think Muireann outlined this pretty well there, but something I think we should
certainly consider in order to tackle all of the issues that Muireann has
outlined is a specific ministry for energy, something to focus on a roll out.Is Eamon Ryan not doing that?
No, it's at the moment there's quite a broad department there.
It includes communications, it includes transport, it includes climate action. Is there too much on his plate?
It's a huge task and it's a huge ask. And I think with the cost of energy with
the need and the urgency to move towards clean renewable energy and get away from that gas and
fossil fuels that we're dependent on. We need to expedite the
roll out of renewable energy. You're saying we need, we need a new Minister for
Energy that the existing Minister for Energy can't do this job on investigating why we are paying so
much more for electricity that I'm not questioning the job that the existing Minister is doing.
I'm saying that because of the task at hand, because of the cost of energy,
because of the cost of electricity to businesses and to households, you know,
we should have a windfall tax in place already. The windfall tax hesitation is is due to come
to the Dáil of this session, which would we, we would stand to get. Let's take that for example.
And I know that won't, you know, that's another matter.
The windfall tax decision was only made because Europe as a block were making that decision
so we got on board with that, but we're lagging behind other European countries. Yes, Europe
made that decision back in October and actually, if the legislation
was put in place in around November, December, we would actually stand to get a far greater windfall
because the prices were much bigger than we need to expedite these type of decisions and measures.
By the way, I also think that the private. You're a TD. I'm allowed to cast a critical eye on things,
but things need to happen fast. Absolutely.
Also, I think the private market have a, have a role to play.
ESB for example, they have profits in 2022 of €847 million.
The government will obviously get a dividend of that.
But I do think ESB and Electric Ireland have a far too big a share
I would say in the electricity supply market. I think there needs to be more competition
that could bring down prices as well. Ok, that's interesting to hear that
for someone with a coalition party. Louise, I take it you'd agree with everything Chris has to say.
Would you agree with having a standalone portfolio,
Minister for energy, to really look at why we are paying so much so much more
for our electricity than everyone else? I think it was, it was interesting
to hear Christopher say that, you know, he doesn't think that the
way that his government is structured that he supports is, is structured in the right way.
And I think that, and which minister would you get rid of them?
Because I mean, there's only, I mean, it is a political question.
It is a political question. So the government representative
thinks we need more competition. In actual fact, you know, once the market
deregulated, the prices started to go up. So I'm not certain that more competition
is necessarily the answer. But what I do know is we do need
to bring the cost for consumers down. So we saw Electric Ireland passed on
15% savings to businesses. I mean, the question has to
be asked if that can be done and if wholesale electricity prices and they are, are at 50% of
what they were this time last year. Well, then we need to ask why is
that not being passed on? But we also need to know why
has there been so much foot-dragging in relation to the windfall taxes?
I raised this, and I think Pierce Doherty raised it as well.
I think it's almost a year ago now and the government just delayed and delayed and delayed.
They don't live in the real world. I don't know what people are suffering.
Daragh just on this passing down discounts or passing down reduced prices to electricity
to customers, why isn't that happening quicker enough?
What's stalling all of that? Well, hedging and all of that, and also there are inefficiencies in the market because the
cost of generating electricity in Ireland seems to be way above what it is in other countries.
So even today, and I know a lot of people think lots of suppliers are making supernormal profits,
not all of them are in Ireland at least. But the cost of energy of
electricity at the moment, for the first three months of the year was 155 megawatts
that's still 300% of what it was in 2020. So there's actually nothing to pass on
at the moment. Now,
I don't know why, I don't know why electricity costs so much to generate.
But at the moment, it doesn't seem to be anything to pass on because it's still at absolutely
astronomical levels in Ireland, but seems to have eased back in other countries.
The other issue, quickly, is just around hedging. Companies, they buy their, you know, their
energy at different stages throughout the year. Some companies would have bought electricity last
year when it was at a much, much higher price. So that kind of has to wash through the system.
But I'm hopeful that we might see some price decreases, probably quite small, but we might
see some in the second half of this year. All right.
Unfortunately, we have to leave that there for now.
My thanks to our panel tonight to everyone who has joined.