Cost of electricity above EU average despite price cuts

IRISH HOUSEHOLDERS and businesses are still paying more on average for electricity than their European counterparts but the gap is closing, the Sustainable Energy Authority of Ireland has said.

According to figures released yesterday, electricity prices fell for households and businesses in the second half of 2009.

This was accompanied by significant falls of up to 26 per cent in the price of gas.

In general prices in Ireland fell at a faster rate than the EU, resulting in Ireland moving significantly closer to the EU average price for electricity, and significantly lower than the average price for gas.

The authority said that when prices were adjusted for what it called “purchase power parity” between countries, Ireland’s prices for gas and electricity were 13 per cent cheaper for households than the EU average.

According to the figures, Irish gas prices to business were below the EU average in all consumption bands except the smallest consumers. Prices for medium consumers were up to 11 per cent below the EU average, while prices for some bigger consumers fell by 26 percent.

According to the authority the fall in prices in the final six months of 2009 was due to a complex range of factors, including competition in the electricity market.

But it noted Ireland’s renewable energy contribution has grown strongly and is ahead of both national and EU targets.

The authority said Ireland is now becoming “one of the world’s leading countries in the use of wind energy for electricity generation”. While the authority said “the trend is good and likely to continue” a spokesman noted “there is a need to drive progress in biofuel”.

At the end of 2009 just 1.5 percent of the State’s energy needs for transport were provided by renewable resources, the overwhelming majority of which was biofuel.

This figure is to be doubled to 3 per cent by this year, through a requirement that oil importers mix biofuel with both diesel and petrol.

The Sustainable Energy Authority of Ireland yesterday acknowledged farmers’ concern that oil companies may import the biofuel. Farmers have warned this may result in a dependence on imported fossil fuels being replaced by a dependence on imported biofuel. The Irish Farmers’ Association in particular has expressed concern that a “jobs dividend” for farmers be created by using Irish grown biofuel.

However, while a spokesman for the Sustainable Energy Authority acknowledged “things aren’t as smooth as they ought to be”, he said there are “some guys who are working away. There are plenty of people who are not making headlines because they are getting on with it”.

He added that price was a consideration and the future use of electric vehicles would also affect the figures for renewable energy use in the transport fleet.

Carbon emissions avoided through renewable energy use in the State’s transport fleet increased by an average 7.3 percent per year between 1990 and 2008 reaching 2.83 million tonnes.

Responding to the figures yesterday Minister for Energy Eamon Ryan said the data showed that from “far above” the EU average, Ireland was converging on the average, and was already in some cases below it.

He said the constraints Ireland faced as an island with higher transport costs, a dispersed population and the lack of economies of scale in power generation made the improvements in Ireland’s position more significant.

“Our success in the area of renewables is only adding to our competitive international advantage. It is clear such success can only come about through collaboration and competition and careful management of the market,” he said.

Electric costs: how ireland fares

In Ireland, you can run a 100-watt bulb for 10 hours, or enjoy a 10-minute instant electric shower, for one unit (a kilowatt hour or kWh) of electricity, costing an average price of 18.55 cent.

To have a similar wash or run the same bulb for the same amount of time in Estonia– where electricity prices are cheapest – will cost you just 9.2 cent.

In Romania,the wash or running the light bulb for similar periods would cost 9.79 cent and in Greece it would be 10.32.

In Germany, the cost of either the wash or the light would be 22.94 cent, and in the UK the price is 14.07 cent.

In Denmark, where electricity is most expensive among EU states, 10 hours of light from the bulb or a 10-minute shower would cost you 25.53 cent.

Sources:Sustainable Energy Authority of Ireland and the ESB