Dáil Éireann Debate, Thursday - 28 September 2023
116. Deputy Darren O'Rourke asked the Minister for the Environment, Climate and Communications what measures he is taking to identify and address the underlying causes of high electricity prices here and the fact that Irish retail energy prices are falling more slowly in Ireland than in other EU member states; and if he will make a statement on the matter. [41784/23]
View answerThe core driver of high retail energy prices are high wholesale energy prices. Ireland is a price taker on international energy markets; the rise in wholesale gas prices since the Russian invasion of Ukraine and the strong correlation between gas and electricity prices has therefore had a direct impact on the cost of electricity here. Due to high gas storage levels, warmer than normal winter conditions and efforts to reduce natural gas demand across Europe, wholesale gas prices have fallen substantially and are currently well below the peak values of August 2022. However, wholesale gas prices are still trading significantly above their pre-pandemic levels.
There are several other long-standing reasons why Irish electricity prices have been higher than those of many other EU countries, including our widely-dispersed population, our historic dependence on fossil fuels, the small size of our market and our peripheral location. The Government has adopted policies that in the long-term will protect Irish consumers from volatility in wholesale energy markets, by investing in renewable energy technology, improving the energy efficiency of buildings, and deepening interconnection with European energy markets.
Responsibility for the regulation of the retail electricity and gas markets was assigned to the Commission for Regulation of Utilities (CRU) under the Electricity Regulation Act 1999 and subsequent legislation. In June, I wrote to CRU to investigate pricing strategies within retail energy markets, and to report on whether market failure has occurred. Their report found no prima facie evidence of market failures, and CRU will continue to monitor this going forward. In recent weeks, price reductions have been announced the main suppliers who share approximately 98% of both the retail electricity and gas markets in Ireland.
