Iberdrola set to leave Irish market - East Coast FM
We’ve been living with the increased cost of energy for quite some time.
The more suppliers in the market, the better it will be for consumers as there will be more competition and you might be able to shop around.
One particular energy provider, Iberdrola, has just decided to leave the Irish market though.
How many people are impacted by Iberdrola’s departure?
About 30,000 - 35,000 customers will be affected by Iberdrola’s decision to leave the Irish market.
Many people may not be familiar with Iberdrola. It’s a big Spanish energy company, with operations in Europe and worldwide.
In 2019, Iberdrola decided to enter the Irish market, but unfortunately, the company has now decided that the market here isn’t right for them.
I would say that you can still choose your own energy supplier if you want by shopping around.
The current Irish energy market
Iberdrola has been here for 2-3 years, which isn’t very long but I don’t think it got the business it was expecting.
Until recently, there were around 13 or 14 energy suppliers in Ireland. This is a lot for a country as small as Ireland. There's only around 2.2 million households here for electricity and only around 600,000 households for gas.
Only a few months ago, we saw Bright energy leave the Irish energy market. So that’s two energy suppliers who have left within a few months.
The energy crisis and rapidly rising prices hasn't helped things either.
Will this impact competitiveness?
Not really. Even if they were a big company, I wouldn’t say competitiveness would be impacted too much. The reason is that we have quite high electricity prices in Ireland.
They’re around the 4th highest in the EU, around 26% above our European neighbours on average.
The reason why we have high prices isn’t that we don’t have enough suppliers.
- We’re an island
- We don’t use nuclear
- There are inefficiencies generating electricity in Ireland
- We have a very dispersed population, which also doesn’t help. It means we have quite high fixed costs which need to be shared among a small population.
Supplier of last resort
In Ireland, we have a concept called the supplier of last resort. When a supplier leaves, the Commission for Regulation of Utilities (CRU) has in place a process that must be followed.
The suppliers of last resort are Electric Ireland for electricity and Bord Gáis Energy for gas. If any supplier exists, customers automatically get moved to these suppliers.
If you’re an Iberdrola customer, you don’t have to do anything, but you can of course choose your own supplier.
If you are moved to Electric Ireland or Bord Gáis, the chances are that you won’t get a discount. If people are on the standard rates, then they’re missing out on potential discounts.
Will customers be charged an exit fee for switching?
Usually when you sign up for a new energy deal, and you decide to leave within 12 months, you’ll be charged an early exit fee.
I’m not 100% sure if people will be charged this fee if they’re in a discounted contract with Iberdrola and they want to switch suppliers.
Hopefully, Iberdrola will waive this fee for those who want to switch so that they won’t be penalised.
What suppliers have the best deals?
Electric Ireland is likely the cheapest energy provider for those looking to switch. The supplier has increased their prices by 40-45%, which seems incredibly high, but other suppliers have increased prices by 65-120%.
However, I don’t think Iberdrola customers who get transfered over to Electric Ireland or Bord Gáis will get a new customer discount. They will just get the standard deal.
Find the best deal for you on bonkers.ie
Recently the CRU did some research which showed around 40% of people have never switched energy supplier, which is crazy. These consumers are paying too much.
If you’re one of these consumers, we’d highly recommend switching to a cheaper supplier
You can compare the best energy deals right here on bonkers.ie. Our comparison tool is easy-to-use, impartial, and 100% free.