Irish electricity prices have become a major part of the political and policy debate in Ireland. As a key contributor to the general price rises we’ve all observed, electricity prices have been the subject of a great deal of analysis and policy interventions. According to the Commission for Regulation of Utilities (CRU) close to 300,000 households and more than 41,000 businesses were in arrears on their electricity bills in September 2025. This is more than one in every eight domestic and non-domestic customers.
Given these issues, an analysis of the path of electricity prices over time is warranted, examining both the shorter time span associated with the cost of living crisis and the longer term dynamics within a changing Irish electricity market. Are our electricity prices merely a reflection of Europe wide or global issues over which we have limited control, or are there Irish specific factors at work?
New NERI research in collaboration with the Energy Services Union (ESU) – in the form of a report and summary InBrief - investigates the extent to which Irish electricity prices have increased over time relative to other European states. This study also aims to investigate whether Irish prices have changed in terms of their relative ranking within a group of comparator states.
We find that electricity prices in Ireland have indeed risen substantially from the mid 1990s, with the period from 2001 to 2007 showing particularly pronounced relative price growth. This price growth outstripped price increases in the economy as a whole (general inflation) in both Ireland and the Euro area. Irish electricity price growth from the 1990s is also dramatic compared to other EU states, showing much higher cumulative cost growth than experienced elsewhere notwithstanding some temporary price spikes in other states. Irish price growth was the highest amongst the group of 15 states which were EU members prior to the organisation’s expansion in 2004. Irish prices grew by more than four times in nominal terms (more than doubling in price adjusted or real terms) between January 1996 and September 2025. The only other (former) EU15 state showing similar rises was the UK.
A comparison of prices per unit of electricity suggests that Irish prices have gone from relatively cheap to comparatively expensive for many consumption bands. While historic data are limited, a relatively typical consumer in Ireland (on both the domestic and non-domestic side) faced relatively low prices in the 1980s and 1990s. Our prices increased relative to other EU15 members pushing us towards the most expensive within the group.
This is particularly true of prices excluding taxes and levies, the latter price component representing a relatively minor element of prices in both absolute and proportional terms over time, and a net subsidy more recently meaning total prices were actually lower than pre-tax and levy costs. A more detailed analysis shows a more varied picture depending on bands reflecting annual use. Household consumers face high euro prices for most bands, though Ireland’s relative rank improves when you adjust for the high price level observed generally in Ireland. Non-domestic, or business customers face among the highest costs in euro terms particularly for unit prices excluding VAT and other recoverable taxes and levies. These are especially relevant for businesses given their ability to claim back tax, and the implications of high euro prices for competitiveness.
A further analysis of these pre-tax and levy unit prices was performed on the energy and supply cost and network cost components that make up these unit costs in Ireland. The analysis suggests that, while there is evidence of elevated network costs in Ireland – reflecting a dispersed population and historic underinvestment in grid infrastructure - recent price movements were largely related to energy and supply costs.
These costs are influenced in large part by the significant role played by natural gas within our generation mix. Wholesale prices are heavily influenced by the cost of the last generator required to meet electricity demand, leading to a close link between electricity prices and prices for natural gas. The report concludes with a brief analysis of other potential cost factors which have driven up Irish prices, including rapid growth in electricity demand, limits on our ability to incorporate cheap renewable electricity and our market’s limited size and relative isolation from other European electricity systems.
Over the next few years, policy could act to reduce the role of natural gas in our system through grid investment. This could make more effective use of cheap renewable energy sources, contributing to our emissions reductions targets and reducing prices. Investment in interconnections with other European systems could help us source electricity in situations of high demand, curbing potential price spikes.
Irish electricity prices have been subsidised to a significant degree by government over the past few years, through a series of “one off” budget measures. This reflects an apparent long term policy approach of applying relatively low (or negative) taxes and levies to electricity prices to mitigate against high unit costs. However, this has failed to address underlying cost issues. Electricity credits for example, have reduced the impact of price rises for many households and businesses in recent budgets at high cost to the state. Their withdrawal in the most recent budget may see households and businesses struggle with ever higher bills.
This points to the need to rethink our approach to the electricity market. The change period of the early 2000s, which saw Irish prices begin their continuous climb, raises questions about the design of our electricity market and deserves more scrutiny. If the goal of electricity market liberalisation was to lower prices, it appears to have been a failure.
Further research could investigate these issues and explore the potential of electricity market redesign to reduce prices and meet climate goals.