Ireland had the eighth highest electricity prices in Europe in 2024, according to new research from the Economic and Social Research Institute, highlighting the continued pressure on households despite Government supports.
The study found that, without interventions such as VAT reductions and energy credits, Ireland would have had the highest electricity prices on the continent.
These measures helped cushion consumers during a period of volatile global energy markets, but underlying costs remain among the most expensive in Europe.
ESRI senior research officer Dr Muireann Lynch said “while interventions such as energy credits have alleviated much of the burden for Irish consumers, Irish electricity prices have been among the most expensive in Europe during the 2018–2024 period of analysis.”
A key driver behind these high costs is Ireland’s heavy reliance on natural gas for electricity generation.
The ESRI found that Irish electricity prices closely track fluctuations in gas prices, leaving consumers particularly exposed to international market shocks. While many European countries have diversified their energy mix in recent years, Ireland has been slower to reduce its dependence on gas-fired generation.
Gas currently accounts for around 40% of Ireland’s electricity generation, with renewables making up a similar share. However, researchers say that increasing renewable energy capacity would provide a crucial buffer against volatile fossil fuel prices.
“Irish energy costs are higher than average and particularly exposed to the international price of natural gas,” the ESRI noted, adding that this reliance has “imposed a considerable additional cost on consumers.”
Speaking on RTÉ’s Morning Ireland, Dr Lynch said that when looking purely at the cost of generating and supplying electricity—before taxes and supports—Ireland consistently ranks among the top three most expensive countries in Europe.
“The energy and supply is where Ireland is a real outlier. We’re very, very high on that,” she said. “A large part of it seems to be driven by the fuel mix, the fact that we are so heavily reliant on gas compared to other European countries.”
She also pointed to potential structural issues within the market, suggesting that lower levels of competition in Ireland compared to other European countries could be contributing to higher prices.
While network costs—charges for maintaining and upgrading the electricity system—have risen in recent years, the ESRI said these increases have been relatively small compared to the impact of fuel prices. However, these costs are expected to grow in the coming years as investment in infrastructure continues.
The Commission for Regulation of Utilities has forecast that network charges could add between €59 and €106 per year to household electricity bills by 2029 and 2030.
The research also highlights that energy credits introduced during the cost-of-living crisis played a significant role in lowering bills in 2024, but these supports have since been withdrawn, potentially leaving households more exposed to future price increases.
Looking ahead, the ESRI said expanding renewable energy—particularly as newer technologies such as floating wind turbines become more viable—could help stabilise prices over time. However, it warned that the full cost of developing and subsidising renewable infrastructure remains uncertain.
The study also notes that electricity prices across Europe surged following Russia's invasion of Ukraine, which drove up gas prices significantly. More recent geopolitical tensions, including conflict in the Middle East, were not fully captured in the 2024 data but are expected to continue influencing global energy markets.
Despite Ireland’s high nominal electricity costs, the ESRI found that when adjusted for purchasing power, prices are closer to the EU average. However, researchers cautioned that high electricity costs still feed into the overall cost of living, impacting households and businesses alike.
Ultimately, the findings underline the challenge facing policymakers: balancing the need for investment in energy infrastructure and renewables, while protecting consumers from some of the highest electricity costs in Europe.
