IRELAND HAS the highest electricity prices in Europe for many businesses and domestic consumers, largely due to a dependence on electricity generated from fossil fuels, according to a new report.
Electricity costs the Irish domestic consumer 20 per cent more than the EU average, according to the report by Sustainable Energy Ireland (SEI), and some industrial customers are paying up to 52 per cent above the EU average.
Gas prices in Ireland are 17 per cent above average for domestic users. Most industrial and commercial customers pay 9-13 per cent more than average, except for one category of medium-use customers who pay 6 per cent less.
However, the report also quotes figures adjusted for cost of living differences between countries, and these show that electricity and gas prices in Ireland are 9 per cent and 2 per cent respectively below the EU average.
SEI says that the main factor behind high electricity prices, especially in times of volatile price changes, is a dependence on generation from fossil fuels. Some 88 per cent of Irish electricity is generated from fossil fuels, and 60 per cent from oil and gas alone.
This is the highest in Europe, according to Brian Motherway of SEI, and leaves us exposed to the vagaries of fuel price changes.
"Increasing the contribution of renewable sources to energy supply is critical - it will help address costs, support our security of supply and ensure we deliver on all our national and EU targets in energy and climate change," he said.
Ireland's use of renewable energy has doubled in the past five years, largely thanks to a boom in wind power, a second report by SEI finds.
Renewable energy sources - principally wind, hydro and biomass - generated over 9 per cent of total electricity last year, and a target of 15 per cent by 2010 is "within our reach".
Wind power has grown rapidly since the first wind farms came on line in 1992 and Ireland now has the greatest wind power penetration in the world. Opposition to wind farms has grown commensurately and the report says that there has been a "significant slowdown" in development in the past two years.
However, Mr Motherway said that he was confident the growth targets for wind energy would be met. "There is plenty of controversy, but also many successful projects going ahead. For every one that is delayed, another one or two are going ahead," he said.
Between 50 and 100 new wind energy projects are currently in planning.
The share of electricity generated from renewable energy nearly doubled between 1990 and 2007, from 4.9 per cent to 9.4 per cent. The longer term target is to generate 40 per cent of electricity from renewable sources by 2020.
The report also points to a significant growth in the share of transport energy generated from renewables from a small base. Biofuels, for example, accounted for 0.5 per cent of petrol and diesel sales last year, growing from 0.1 per cent in 2006.
Biodiesel dominates the biofuel market, with a 76 per cent share, followed by bioethanol (16 per cent) and pure plant oil (8 per cent). Most of these fuels are produced in Ireland.