State should cut hefty electricity grid charges to reduce energy costs, Commissioner Kadri Simson says

“If we are looking at retail electricity bills that consumers do receive, then transmission costs are one of the top, highest, in the EU,” the Estonian commissioner told the Irish Independent on the eve of her two-day visit to Ireland which begins Wednesday.

“If you want to make electricity more affordable for your households, there are other ways that are also worth considering. The system costs in Ireland seem to be significantly higher than the rest of Europe.”

Irish electricity prices are the fourth most expensive in the EU, according to Eurostat, but stripping out taxes places Ireland in first place, with prices 60pc above the average.

That is largely down to what EirGrid and ESB Networks charge suppliers, including wind and solar farms, to connect to the grid and transmit their power around the country.

Those charges make up over 30pc of a consumer’s final electricity bill, according to price comparison site Bonkers.ie. The cost of fuel makes up around 40pc.

Spain has temporarily reduced transmission tariffs by 80pc, but has also capped the price that power plants pay for the coal, oil or gas they use to generate electricity – a move the EU warned was “very costly” given the subsidies it entails.

The UK has a direct cap on some consumers’ bills, which has resulted in many smaller energy companies going bust during the current crisis.

Ms Simson said the EU was “open to discuss” a price cap with the Irish Government, but said it should look at better ways to bring down households’ energy bills.

“I think that in this extraordinary situation, governments should also consider alternative options that the Commission prefers.”

The EU is expecting an even tougher winter ahead as it weans itself off Russian oil and gas.

This week EU leaders agreed on a partial Russian oil ban, which Ms Simson said would hit Moscow in the pocket while having a “milder” effect on global oil prices.

“There is not much hope that next winter will be easier than the previous one was, especially because markets are uncertain what will happen, and this reflects in the energy prices.”

She said the UK has been put on stand-by in case the crisis has a knock-on effect on Ireland.

Ireland gets most of its gas and oil from the UK, with gas coming in via two pipelines from Scotland.

The country is not connected to the European mainland yet, but the planned Celtic Interconnector with France – which cleared the first stage of the planning process last week – is due to be completed in 2026.

“There are several member states who cannot tackle the issue of full disruption on their own,” Ms Simson said.

“They need to rely on their neighbours. This is also the case for Ireland.

“Leaving aside all the difficulties that we do have with UK, there we do see also a willingness to help European member states to be better prepared for the hostile action of Russia.”

The former MP and Estonian economy minister is in Ireland on Wednesday and Thursday, where she will attend the European liberal party congress and meet the Taoiseach.

She will also meet Environment Minister Eamon Ryan, the Oireachtas climate action committee and energy companies, and she will visit the EU-funded rewetting project at Ballycon bog in Co Offaly.

Her visit comes the day after Ireland’s Environmental Protection Agency warned the Government it was in danger of missing its legally binding 2030 emission reduction target by almost half.

Ireland has previously failed to meet its EU-mandated 2020 targets.

Ms Simson said Ireland’s targets were “ambitious” because it has significant wind and solar resources.

“You committed to higher targets because we mapped your wind resources, your solar resources, and together we agreed that you can do better than several other – for example, landlocked – countries in central Europe.

“You have the geographical position that supports this high ambition.”

She said Ireland should shorten the time it takes to get a permit for strategic renewable energy projects, which is one of the recommendations in the EU’s latest energy policy overhaul, RepowerEU.

Under the plan, battery storage or offshore wind are considered to have “overriding public interest” and given fast-track approval, while certain areas can be granted a special status, allowing them some environmental and planning red tape.

“We are not saying that you should forget all the environmental considerations. We are saying that governments should grant these ‘go to’ zones to territories where there is not such a strong environmental impact.”

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