Why is energy more expensive for those with district heating systems? - Newstalk

Image audioImage Why is energy more expensive for those with district heating systems? - Newstalk

Daragh Cassidy appeared on Newstalk’s Lunchtime Live show to answer consumer queries and provide advice on the ongoing energy crisis. In particular, Daragh focused on explaining why those with a district heating system pay more for their energy bills, and discusses time of use tariffs.

Listen back above or take a look at the main points below.

Why getting energy through a district heating systems is more expensive 

  • The issue with district heating systems is that inhabitants in certain apartment blocks are forced to pay for gas at commercial rates. They cannot get the same rates that households get.
  • Business energy rates are much higher than household rates at the moment. 
  • One of the reasons this could be the case is that small businesses are being penalised so that households can have cheaper energy rates, however suppliers have denied this.
  • Prior to the energy crisis, commercial rates would have been cheaper, but that has now changed.
  • The issue hasn’t really come to a head yet, but probably will in the next few weeks when people start getting bills. There will be more pressure on the Government as these price increases are unsustainable.
  • If you wanted to dispute the prices of a district heating system, you would have to go to the OMC (owners management company), who makes all the big decisions. 
  • Ultimately it would be the OMC who would decide whether the apartment complex could go to another system. 
  • The price of gas on wholesale markets is up between 800% - 1000%, so everyone will see their bills go up.
  • Those in apartment buildings who have a district heating system won’t be able to move to a prepay system either.
  • In general, prepay energy tends to be more expensive than bill pay, particularly if you’re able to switch regularly. At the moment, the average gas and electricity bill with the main prepay provider is around €4,100. 
  • With prepay, you’re paying a daily standing charge, along with a prepay meter charge, which can make it quite expensive. Around €700-800 would go on the standing charge before you even use any energy.
  • In general, it’s cheaper to get your electricity through direct debit.

Time of use tariffs

  • There’s a lot of confusion at the moment around time of use tariffs and what meter you have. The Government wants people to reduce electricity consumption between 5 and 7PM. However, unless you have a smart meter and a smart tariff, or you have a NightSaver meter, you’ll just be charged the same price throughout the day.
  • If you have a standard meter, you won’t be saving any money by putting a wash on at 9PM, as opposed to 5PM, unless you’re on a smart tariff or have a day/night meter.

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