Latest figures from Eurostat show that electricity prices in Ireland are a staggering 48% above the EU average, behind only Denmark and Belgium.
Nothing's ever really cheap in Ireland. Whether it's food, drink, transport or rent, the price of everything here seems to be above the EU average. And according to the latest figures from Eurostat, the EU's statistical agency, we can definitely add electricity to the list too!
The energy crisis means that gas and electricity prices have skyrocketed all over Europe over the past 18 months. But prices here were already high to begin with and they seem to have risen more than in many other countries over the past year.
Let's look at the figures...
At 41.99 cent per kWh (inc. VAT and levies), prices here are a staggering 48% above the EU average of 28.40 cent and trail only Denmark and Belgium, according to the latest figures for the second half of 2022.
This means the average household in Ireland is paying over €550 extra a year for their electricity compared to the EU average.
Prices are lowest in Hungary (10.84 cent), Bulgaria (11.47 cent) and Malta (12.77 cent).
Electricity prices rose in all EU member states apart from the Netherlands and Malta.
The largest increase was seen in Romania, where prices rose a whopping 112% compared to the second half of 2021, followed by Czechia (+97%) and Denmark (+70%).
The lowest increase was seen in Luxembourg, where prices only rose by 3%, followed by Austria and Germany, where prices increased by just 4% in both countries.
Prices in Ireland were up 41%.
Overall, electricity prices rose by almost 12.5% across the entire EU over the past year and are up 56% compared to 2007 and are now at record levels.
The same report showed Ireland has the seventh most expensive gas in the EU, with prices here 36% above the EU average at 15.44 cent per kWh.
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Compared with the second half of 2021, the cost of electricity that was composed of government taxes and levies dropped sharply from 36% to 16% with all EU governments either reducing VAT or implementing government subsidies to help consumers with high energy costs.
The amount of gas that was composed of government taxes and levies fell from 27% to 14%.
In Ireland our own Government has temporarily reduced VAT from 13.5% to 9% while the PSO levy has been reduced to zero.
Why are electricity prices so high?
This question has been asked many times and there is no one single answer.
However a lot of electricity in Ireland is still generated by burning gas and coal, a lot of which has to be imported and which is volatile in price. And because Ireland is an island on the edge of the Atlantic, there's an added cost in getting it all here.
What's more, although our level of renewable energy has increased hugely over the past decade, and now accounts for over 30% of the electricity that we generate, it's still slightly more expensive to produce than non-renewable energy according to most experts.
Another cost driver relates to the relatively dispersed and low density of Ireland’s population. This means that per head of population, we need more high voltage wires, pylons and electrical lines than in many other countries in order to have a safe and secure supply of electricity, which puts upward pressure on the price of electricity too.
For more information on why electricity prices in Ireland are so high check out our informative explainer on the topic.
Does tax contribute to higher electricity prices?
Believe it or not, energy is one of the few products where Irish consumers are taxed relatively lightly compared to the EU average. While government taxes and charges such as VAT and the PSO levy usually make up around 20% of the final price paid for electricity by consumers in Ireland, it's around 36% on average in Europe - however as mention above temporary measures have reduced the tax burden everywhere.
This means that when you look at the net price of electricity that suppliers here charge - by excluding government taxes and charges - prices in Ireland are actually the most expensive in the EU.
This means that if the Government were to increase taxes and levies on electricity to bring us into line with the EU average or to try meet environmental goals, consumers would be faced with the highest electricity prices in Europe by far.
What can you do?
Gas and electricity prices are currently at record highs across Europe.
So if you're looking for better value or are struggling with your energy bills then the simple solution is to look at switching energy supplier.
There are still discounts available to those who switch. It’s quick and easy to switch and can all be done online in the space of a few minutes and will save the average customer over €400 a year. However if you live in a poorly insulated property or a home with more than three bedrooms, your savings could be even greater!
Use our energy price comparison service to see what you could save and make the switch today.
Alternatively, you might want to consider a long-term solution, such as retrofitting your home. As well as saving money on your energy bills, retrofitting can help you reduce your carbon footprint. However, this can require substantial investment, so why not review your finance options here to learn more about various grants and green loans, if interested.
Don’t forget that you can always change your habits around the home to save money on electricity bills, too. Take a look at these 16 ways to use less electricity and save money to learn more about how you can start to reduce your energy consumption today.
What do you think?
Are you surprised by the recent Eurostat figures? Will you be making changes to reduce your household electricity bills? Get in touch with us in the comments below and let us know.