A new report from the Economic and Social Research Institute (ESRI), A descriptive comparison of Irish and European electricity prices: 2018–2024, provides an important evidence-based assessment of how Irish electricity prices compare with those across Europe, and what factors have driven price trends in recent years.
The report arrives at a critical time for Ireland’s energy sector. Public and political debate around electricity prices has intensified in recent years, particularly following the global energy crisis triggered by Russia’s invasion of Ukraine and more recently, conflict in the Middle East. Questions around affordability, market design, infrastructure investment, and alleged “price gouging” continue to feature prominently in discussions on the energy transition.
The ESRI’s analysis makes a valuable contribution to that debate by highlighting the structural drivers of Irish electricity prices and distinguishing between the different components that make up household electricity bills. Importantly, it also reinforces the need for a more nuanced discussion around electricity prices in Ireland and the broader European context.
What the Report Says About Irish Prices
The ESRI finds that, excluding taxes and levies, Ireland recorded the highest household electricity prices in Europe in 2024. More recent data published by Eurostat for the second half of 2025 similarly found that Ireland recorded the highest household electricity prices in the EU at €40.42 per 100 kWh, ahead of Germany and Belgium. Eurostat also reported that Ireland experienced one of the largest annual increases in household electricity prices across the EU, with prices rising by 32.7% year-on-year.
However, both the ESRI and Eurostat provide important nuance that is often missing from public discussion. Once taxes, levies, Government supports, energy credits, and purchasing power adjustments are taken into account, Ireland’s relative position changes materially. The ESRI notes that Ireland moved from being the eighth most expensive country in nominal terms to fifteenth when adjusted for purchasing power and cost of living. Similarly, Eurostat found that countries such as Romania, Czechia, and Poland recorded higher household electricity prices on a purchasing power standard (PPS) basis. This distinction matters. Ireland is a relatively high-cost economy more broadly, and electricity prices must therefore be considered within that wider economic context rather than through headline nominal comparisons alone.
The ESRI also shows that Government interventions, including energy credits, reduced VAT rates, and PSO dynamics, materially reduced the final prices paid by consumers during the energy crisis. Eurostat similarly highlighted that taxes and levies accounted for almost 29% of the final household electricity bill across the EU in the second half of 2025.
These findings support another key EAI position: while wholesale energy prices experienced extreme volatility, suppliers’ pricing structures and hedging strategies helped shield customers from the full extent of short-term market shocks. Retail prices do not move in lockstep with daily wholesale markets. Suppliers purchase energy months — and often years — in advance through hedging strategies designed to provide stability and predictability for consumers. The ESRI’s findings around delayed and smoothed retail price movements relative to wholesale prices are broadly consistent with this reality.
The Drivers of Increased Prices: Ireland’s Exposure to International Gas Prices
One of the clearest conclusions from the ESRI report is that Ireland’s electricity prices remain heavily influenced by international gas markets. The report notes that approximately 50% of Irish electricity generation comes from natural gas and that Irish wholesale electricity prices are therefore particularly exposed to movements in global gas prices. This aligns closely with a long-standing position highlighted by the EAI: Irish electricity prices are structurally linked to gas prices because gas-fired generation frequently sets the wholesale market price within the Single Electricity Market (SEM).
The ESRI demonstrates that the sharp increase in electricity prices across Europe during 2021 and 2022 was fundamentally linked to the unprecedented spike in international gas prices following both post-COVID demand recovery and Russian invasion of Ukraine. More recently, conflict in the Middle East and wider global energy market uncertainty have continued to place pressure on international fuel markets.
Importantly, the report reinforces that Ireland’s price challenge was not unique, nor was it the result of any sort of failure in domestic retail competition. Rather, Ireland was particularly exposed because of its reliance on imported natural gas and the continued role of gas generation in maintaining system security and balancing variable renewable generation. The report also points to international academic literature showing that wholesale gas prices are often the dominant driver of electricity prices across Europe, particularly in gas-reliant systems.
The Drivers of Increased Prices: Network Costs
The report also provides an important assessment of additional drivers of increased Irish electricity prices. Included in this assessment is the impact and evolution of network costs. These comprise the costs and associated charges required to fund the operation, maintenance, and development of Ireland’s transmission and distribution networks. As the ESRI notes, these regulated charges are levied on suppliers, who in turn recover them through retail tariffs paid by consumers. While the report concludes that network costs were not the primary driver of the sharp increases in electricity prices observed over the period examined, it nevertheless identifies considerable growth in both transmission and distribution system costs. This serves as an important reminder that retail electricity prices are influenced by more than wholesale energy costs alone: consumer bills also reflect a range of regulated charges necessary to operate, maintain, and develop the electricity system, alongside other policy-driven costs associated with ensuring security of supply and supporting the energy transition.
The report further identifies significant future increases in network investment requirements under the CRU’s Price Review 6 (PR6) framework. This reflects the reality of Ireland’s energy transition. While these investments will inevitably place upward pressure on network charges, the report is particularly useful in highlighting that they should not simply be viewed as additional costs on consumer bills. Rather, they represent strategic investments necessary to modernise Ireland’s electricity system, facilitate the integration of renewable generation, support growing electricity demand, and deliver the long-term climate, competitiveness, and security objectives that underpin Ireland’s energy policy.
The Role of Renewables and the PSO
Another important takeaway from the report relates to renewable electricity supports. The ESRI notes that the Renewable Electricity Support Scheme (RESS) actually delivered net benefits to consumers during periods of exceptionally high wholesale prices because wholesale prices exceeded renewable strike prices. This is an important finding in the context of ongoing debates around renewable support schemes.
The report reinforces that renewable deployment is not only critical for decarbonisation, but also for reducing Ireland’s long-term exposure to volatile imported fossil fuel markets. As the ESRI states, greater renewable deployment should reduce Ireland’s exposure to international fuel prices over time. This strongly supports the EAI’s consistent position that the long-term solution to high electricity prices is reducing gas exposure through accelerated renewable deployment, increased flexibility, storage, network reinforcement, and clean firm capacity. In practical terms, the more renewable electricity Ireland can generate and utilise domestically, the less frequently gas generation will be required to set wholesale electricity prices.
The Importance of Security of Supply
The report also highlights another issue that is often overlooked in price discussions: the cost of maintaining security of supply. The ESRI notes that temporary emergency generation and tighter capacity margins contributed to increased system costs during recent years. This is particularly relevant in the Irish context. As Ireland continues to decarbonise, ensuring sufficient dispatchable and flexible capacity remains essential to maintaining system reliability during periods of low renewable output or high demand.
The report correctly notes that the costs of insufficient generation capacity are often less visible than the costs of investment but are nevertheless very real for consumers and the wider economy. Maintaining security of supply while transitioning to a lower-carbon system therefore remains one of the central challenges facing energy policy in Ireland and across Europe.
A Valuable Contribution to the Debate
Overall, the ESRI report provides a balanced and evidence-based contribution to an increasingly complex public debate.
It reinforces several important realities:
- Irish electricity prices remain heavily exposed to international gas markets;
- While wholesale costs may have been the primary driver of recent price increases, network charges were, and will continue to be, a significant contributing factor;
- Ireland’s relatively high nominal electricity prices must be viewed in the context of wider economic and purchasing power differences;
- Government supports and supplier hedging played an important role in cushioning consumers during the energy crisis;
- Renewable support schemes have helped reduce exposure to volatile fossil fuel prices;
- Significant infrastructure investment will be required to support decarbonisation, electrification, and security of supply; and
- The long-term pathway to more stable electricity prices lies in reducing Ireland’s dependence on imported fossil fuels through greater renewable deployment and system flexibility.
As Ireland continues its energy transition, maintaining an informed and evidence-led discussion around electricity prices will remain essential. The ESRI report – alongside the Eurostat findings – provides an important foundation for that conversation.