Electric Ireland set to increase prices from August - Radio Kerry

Image Electric Ireland set to increase prices from August - Radio Kerry

Electric Ireland is the latest energy supplier to announce a significant increase in the cost of its residential energy prices, with approximately 1.5 million customers set to be impacted.

The 9% electricity increase and 7.8% gas increase will add around €100 and €60 to respective energy bills nationwide and will come into effect from the beginning of August.

Our Head of Communications at bonkers.ie, Daragh Cassidy discusses the latest price increases, as well as rising energy costs in general, with Jerry O'Sullivan on Radio Kerry, and what consumers can do to help offset these price changes.

Here’s an outline of the main points discussed by Daragh in the interview.

Almost all energy suppliers have raised their prices this year, with some increasing prices twice. The increases are hefty and may put households under financial strain.

Why is this happening?

 There are numerous reasons for the increase: 

  • The price of fossil fuels, such as gas, coal and oil, have all shot up over the past few months. This is now being fed through into higher bills for customers.
  • A megawatt of electricity around this time last year was around €30-40, it’s gone up in recent weeks to over €100 at one stage, so it’s trebled. 
  • The lack of renewable energy is a contributor. While we’re producing huge amounts of renewable energy, around 60% of our electricity still comes from burning fossil fuels. 

For more information have a look at our article on why energy prices are increasing.

Will the price of energy get cheaper since we’re producing renewable sources?

In ten or twenty years, hopefully, we will see our electricity bills going down. People need to remember that renewable energy isn’t free. Green energy is good for the environment, but not necessarily good for the pocket.

Renewable energy takes a huge amount of investment to build solar panels, build wind turbines and farms, and then update the grid to be able to cope with it all. That investment at the moment is costing money and is being fed through into higher bills at the moment.

The PSO levy

The PSO levy is just under €90 including VAT each year. This is to help subsidise the production of renewable energy. 

Around 33% of our electricity bill is made up of what’s called distribution tariffs and transmission tariffs. These pay for things like the pylons, the gas pipes, the overhead wires, etc. Those charges are quite high in Ireland.

Renewable energy and fossil fuel energy don’t mix very well. We have an energy grid that has been made for fossil fuels and now we’re trying to invest in that to accept renewable energy. 

It’s estimated that the cost over the next few years to meet the 70% renewable energy target by 2030 could be anywhere between €2 to 2.5 billion. Unfortunately, that’s probably going to feed through into higher prices as well. 

Should the state get involved with more renewable energy projects?

It is part of the Government’s agenda to invest heavily in the grid, so investments are taking place at the moment. 

The other issue is around data centres and the amount of energy they’re using. There’s no point in us investing all of this money into the grid to get renewable energy, which then just goes towards powering a few data centres. 

Even if we start moving towards things like electric cars, that’s going to put a big increase in demand on the network as well. The outlook in the short term for prices isn’t great, although hopefully, we’ve seen the worst of the increases.

Should people always be looking at switching to get the best deal?

We’d always encourage people to switch and save, despite prices increasing.

There’s a huge amount of competition for new business at the moment and you won’t notice a difference between energy suppliers, so you should always try to go for the cheapest supplier. 

If some people are looking to switch at the moment, they can save anywhere between €400-450 a year if they move to cheaper rates.

How can you reduce your bills?

It really does depend on how much energy someone is using. 

Consider the appliances you’re using and whether they’re energy-efficient or not. Also, make sure that they’re sending in readings every month to their supplier so that you’re not getting estimated readings. 

The ESB network tries to come out to households every 4 months or so to read the metre, but sometimes they can’t. In which case, you may get an estimated bill. This means you might overpay or underpay. 

Most suppliers will send notifications so that you know when it’s time to submit a reading. If you don’t get a notification, it may be for GDPR reasons and you haven’t signed up, so check that out. 

Particularly because of Covid, with everyone’s energy demand usage being a little bit different, our energy habits aren’t the same as they used to be. Some of the estimates that suppliers are coming up with may be more wrong than they usually would be.

Compare energy prices today 

What do you think of Electric Ireland’s plan to increase prices? We’d love to know in the comments below.

Remember that you can still save money by switching, despite the recent spate of increases! Our easy-to-use comparison tool allows you to compare deals across a range of 13 energy suppliers. 

Before switching, you may want to take a look at some of the following:

If you have any questions regarding the latest energy price increases, we’d be happy to help. You can reach out to us on social media. We’re on Facebook, Instagram or Twitter.