Molly Ayala
Ireland has experienced a notable decrease in wholesale electricity prices, with a 42.5% drop as of May 2023. However, this has not translated into lower bills for consumers, who continue to face rising energy costs. Despite the downward trend in wholesale prices, electricity suppliers have been tight-lipped about potential cuts to consumer bills. The lag in passing on wholesale price reductions to consumers is attributed to various factors, including the practice of forward buying or hedging, where suppliers purchase electricity months in advance, and the impact of other costs such as carbon tax and network fees. While Ireland has seen a decline in wholesale electricity prices, it is important to note that the country still has some of the most expensive electricity rates in the EU, and consumers are paying significantly more than they did pre-pandemic.
| Characteristics | Values |
|---|---|
| Wholesale electricity prices in Ireland | Dropped by 42.5% in May 2023 |
| Wholesale electricity prices in February 2023 | Dropped by 1.9% from January 2023 |
| Wholesale electricity prices in November 2024 | 18.9% higher than in November 2023 |
| Average price of electricity in April 2025 | 34.63c per kWh |
| Cheapest electricity supplier in April 2025 | Bord Gais Energy |
| Average estimated electricity bill in April 2025 | €1,556.49 including VAT and other charges |
| Cheapest unit rate per kWh in April 2025 | Community Power at 28.80c including VAT |
| Excise duty on electricity supplied for business use | €1 per megawatt-hour |
| VAT on electricity supplies | 23% |
| Household electricity prices change since late 2020 | Increased by 100% to 150% |
| Households' energy bills in 2025 | Likely to be higher than in previous years |
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What You'll Learn
Wholesale electricity prices fell by over 40% in 2023
Wholesale electricity prices in Ireland fell by over 40% in April 2023. This decrease is in comparison to the peak of the energy price surge in 2022, when the wholesale price of electricity was nearly €400 per MWh. In April 2023, the wholesale price of electricity was €126 per MWh, and the average price for the first four months of the year was €148 per MWh. Despite this significant drop in wholesale prices, consumers have been told not to expect lower bills just yet. Electricity suppliers have been tight-lipped about potential cuts to bills, with some suppliers stating that they buy electricity for families and small businesses months in advance, so any cuts in charges are likely to lag behind movements in wholesale markets.
The Central Statistics Office (CSO) in Ireland reported a major fall in wholesale energy prices from the peak surge in 2022. The CSO statistics showed that producer prices for exported goods fell by 1% in April 2023 and are down 1.2% on an annual basis. Producer prices for goods made for the domestic market also decreased by 0.2% in April and are 7.8% higher than in April 2022. The CSO data also indicated that wholesale prices in other sectors, such as food products, beverages, and construction products, were continuing to rise.
The drop in wholesale electricity prices in Ireland can be attributed to several factors, including the mild winter that led to higher European gas stocks and the expectation of further falls in European natural gas prices. Natural gas is a significant fuel for power generation in Ireland, so its impact on wholesale electricity prices is crucial. Additionally, the increase in renewable energy sources, such as solar power and hydropower, may also contribute to the decrease in wholesale electricity prices.
While the drop in wholesale prices is a positive development, it is important to note that household electricity prices in Ireland have doubled or even tripled since late 2020, depending on the supplier. This increase has had a significant impact on families and small businesses, and any relief in the form of lower bills is not yet reflected in the market. It remains to be seen how long it will take for the decreases in wholesale prices to be passed on to consumers and whether electricity suppliers will eventually announce cuts to their rates.
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Household electricity prices have doubled since 2020
Energy prices in Ireland have been fluctuating in recent years, with household electricity prices experiencing a significant increase since 2020. According to sources, household electricity prices in Ireland have doubled since late 2020, with some suppliers reporting increases of up to 150%. This surge in electricity prices is attributed to the energy crisis, which caused wholesale electricity prices to skyrocket.
In 2020, before the energy crisis, the wholesale price of electricity in Ireland was approximately €40 per MWh (megawatt-hour). However, by 2022, it had soared to nearly €400 per MWh, impacting the cost of electricity for households. Despite a decrease in wholesale prices in 2023, electricity suppliers were reluctant to immediately reduce consumer prices, citing the practice of buying electricity in advance and the need for consistent wholesale price drops before making adjustments.
The high electricity prices in Ireland are influenced by several factors, including the country's reliance on natural gas for electricity generation, which is subject to global market fluctuations. Additionally, the increasing number of electrical devices and gadgets in homes contributes to higher overall electricity consumption, despite modern appliances becoming more energy-efficient.
In April 2025, the average price of electricity in Ireland was 34.63c per kWh, based on a standard 24-hour urban rate. Community Power offered the cheapest unit rate per kWh at 28.80c, while Energia had the most expensive rate at 38.08c. The average estimated electricity bill in Ireland, including VAT and other charges, was €1,556.49.
While electricity prices in Ireland experienced a brief decline in 2024, they are projected to rise again in 2025. The PSO Levy for 2024/25 has increased, and the VAT rate on electricity bills, which was reduced to 9% in 2022 to lower home energy costs, is set to be re-evaluated in the 2025 budget. These factors will likely contribute to higher electricity costs for households in Ireland.
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Suppliers are yet to cut bills despite falling wholesale prices
Despite falling wholesale prices, electricity suppliers in Ireland have been reluctant to pass on savings to their customers. As of April 2025, the average price of electricity in the country was 34.63c per kWh, with Community Power offering the cheapest unit rate per kWh at 28.80c, including VAT. This is a far cry from the prices paid pre-pandemic and before the war in Ukraine, which saw electricity prices skyrocket in the second half of 2022.
Electricity suppliers have justified their failure to cut prices by pointing to the lag between wholesale market movements and retail prices, as well as their hedging positions. They argue that they buy electricity sold to families and small businesses months in advance, sometimes up to two years, so any cuts in charges will likely lag behind wholesale market changes. Additionally, suppliers like Electric Ireland's parent company, ESB, want to see more consistent wholesale price drops before reducing the rates charged to households.
However, this delay in passing on savings to consumers has raised concerns among households facing rising energy bills. In January 2025, wholesale gas prices were still more than double the usual levels, and experts warned that another outbreak of war or conflict could cause prices to soar again. Moreover, additional fees and taxes, such as the carbon tax and 'network' fees, have contributed to higher energy costs for Irish households.
While the CRU's Public Service Obligation (PSO) levy has been zero for the present year, it is set to increase to €3.23 ex-VAT or €3.52 with VAT per month from October. The 'network' fee has also increased, resulting in higher charges for households. These factors, coupled with the uncertainty of government energy credits and VAT hikes, mean that households may end up paying almost as much for their energy this winter as they did the previous year.
Although electricity prices in Europe, including Ireland, have shown signs of stabilization, they remain higher than in 2022. With wholesale gas prices still volatile and the possibility of colder winters impacting prices, it is unclear when Irish consumers will see meaningful relief from high energy costs.
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Ireland has some of the most expensive electricity in the EU
Ireland has some of the most expensive electricity prices in the EU, with prices 48% above the EU average of 28.40 cent per kWh. In April 2025, the average price of electricity in Ireland was 34.63 cent per kWh, including VAT and other charges. The high electricity prices in Ireland are due to several factors, including the cost of importing fuel, the dispersed and low-density population, and the increase in wind generation.
In 2020, Ireland had the fourth most expensive electricity prices in the EU, with electricity costing 12% more than the EU average. By 2023, electricity prices in Ireland had risen to become the second-highest in the EU, almost 30% above the average. When taxes and charges such as VAT and the Public Service Obligation (PSO) levy are excluded, Ireland has the most expensive electricity in the EU, with prices 49.48% higher than the EU average.
The high electricity prices in Ireland have been a long-standing issue, with prices increasing by almost 12.5% in the past year and 56% compared to 2007. The energy crisis has further exacerbated the issue, causing electricity prices to skyrocket across Europe. While wholesale electricity prices in Ireland have been falling, with a 42.5% decrease as of May 2023, consumers have been told not to expect lower bills yet. This is because electricity suppliers buy electricity for families and small businesses months in advance, and they want to see more consistent falls in wholesale prices before reducing charges.
Despite the high electricity prices in Ireland, there are ways for consumers to save money. Switching energy suppliers every 12 months can save consumers between €300 and €500 per year. Additionally, taking advantage of discounts offered by energy suppliers to new customers can result in substantial savings. Installing smart meters can also help consumers save by timing their highest energy usage for when it is least expensive.
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The 'raw' cost of electricity is often <50% of the consumer price
Electricity prices in Ireland have been on a downward trajectory since the energy crisis began in late 2021. The wholesale price of electricity in Ireland, which was around €40 per MWh before the crisis, rose to nearly €400 per MWh in 2022. However, as of May 2023, it had dropped to €126, a decrease of 42.5%. Despite this significant drop, consumers are told not to expect lower bills just yet. This is because electricity suppliers buy electricity for consumers months in advance, up to two years, to hedge against price fluctuations.
While wholesale prices are a major component of the final consumer price, there are other factors that contribute to the cost of electricity. The raw cost of electricity, or the cost of generation, is only one aspect of the final price. The generation cost includes fuel expenses, operating costs, and profit margins for generators. Additionally, transmission and distribution systems incur construction, operation, and maintenance costs. These systems connect power plants with consumers and are susceptible to damage from accidents, extreme weather, and cybersecurity threats.
The variability in fuel prices, especially for natural gas and petroleum, also impacts electricity prices. Fuel supply constraints or disruptions due to extreme weather or infrastructure damage can lead to higher fuel prices and, consequently, higher electricity generation costs. The cost of electricity also reflects the expenses involved in building, financing, maintaining, and operating power plants and the electricity grid. Some for-profit utilities include returns for owners and shareholders in their pricing.
It is worth noting that retail electricity prices tend to be highest for residential and commercial consumers. This is because distributing electricity to these consumers is less efficient and more costly. On the other hand, industrial consumers use more electricity and can receive it at higher voltages, making it more cost-effective to supply.
In summary, while the wholesale price of electricity in Ireland has decreased significantly, consumers may not see immediate relief in their bills due to the complex nature of electricity pricing. The raw cost of electricity is indeed a significant factor, but it is often less than 50% of the final consumer price due to various other factors and costs involved in the process of generating, transmitting, and distributing electricity.
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Frequently asked questions
As of April 2025, the average price of electricity in Ireland is 34.63c per kWh. This is a decrease from the previous year, with wholesale electricity prices falling by over 40% since February 2023. However, it is still higher than the pre-pandemic prices.
As of April 2025, Bord Gais Energy is the cheapest electricity provider in Ireland, with an annual bill of €1,257.40.
There are several factors contributing to high electricity prices in Ireland, including the energy crisis, the war in Ukraine, and the carbon tax. Additionally, the wholesale price of electricity has been volatile, affecting the final price paid by consumers.
One way to save money on your electricity bill is to compare energy offers and switch energy providers every 12 months. This can help you save a significant amount on your annual bills. Additionally, you can explore energy assistance programs, such as Ireland's Home Energy Assistance Program (HEAP), which provides support to low-income households with their heating bills.
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