| 13.9°C Dublin

Homes face hike in price of electricity and gas

IRISH households pay more than the EU average for electricity but gas customers benefit from some of the cheapest rates.

However, the price of both electricity and gas are likely to rise in the coming months, consumers were warned last night.

A new report from statistics agency Eurostat found that despite average household prices rising by 7.7pc across the EU last year, gas prices in Ireland fell by 4pc.

It means that Irish homeowners now benefit from the third-cheapest prices in the EU, trailing only the UK and Luxembourg.

But the report warns that Irish electricity prices rose by 1.1pc in the second half of 2010, although this was below the EU average of 5.5pc.

The average price across the EU for 100kWh of electricity is €17.08. In Ireland, 100kWh cost €18.75. This compares with €27.08 in Denmark, €24.38 in Germany and €19.74 in Belgium. The lowest prices are in Bulgaria (€8.30), Estonia (€10), Latvia and Romania (both €10.50).

It comes as Bord Gais last month warned that gas prices were going to rise over the coming months, leading to higher bills, while the ESB last night said that electricity prices were likely to increase but a decision would not be made until September.

The reason why electricity prices are so high here is because Ireland is heavily reliant on fossil fuels to generate power.


Ireland imports 90pc of the fuel needed to produce power, compared with an EU average of 55pc, the Sustainable Energy Authority of Ireland says.

We do not have power lines connected with the UK and other countries, called interconnectors, which would allow us to import cheaper power.

Another reason for price hikes last year was the reintroduction of the public service obligation (PSO) levy in October -- which is charged to all customers to help pay for the cost of renewable energy.

The charge should yield €157m a year and is used to offset costs faced by electricity producers, which are obliged to buy a proportion of renewable and peat-generated electricity. It adds about 5pc to average bills.

"We're still highly dependent on imported fossil fuels. We've limited interconnections with our neighbours and the ESB was subsidising the price for many years," an ESB spokesman said.

Irish Independent