Households face rising energy bills despite falling wholesale prices

Although electricity suppliers have cut their prices on multiple occasions over the last 12 months, consumers are still paying far higher bills than they were pre-pandemic and particularly before the war in Ukraine.

A recent report from EU statistics body, Eurostat, found households in Ireland were paying the second most expensive bills in Europe, with electricity €355 a year more expensive here than the EU average.

Taken together, consumers here are paying €500 more a year for their electricity and gas compared to the average in other EU countries.

Consumer expert Daragh Cassidy, head of communications at price comparison website Bonkers.ie, said to reach the end of 2025 with prices at the same level as now would be considered a positive.

“We definitely won’t return to the prices we saw before the war in Ukraine any time soon,” he said.

Mr Cassidy warned "tough headwinds" ahead in 2025 could see energy bills rise again.

“Since the peak of the energy crisis, gas and electricity prices for consumers have fallen by around 25% to 30% in total,” he said. 

But at the moment, I wouldn’t be betting on any further big price decreases any time soon, unfortunately.

“Wholesale gas prices are still over double what would, until recently, have been considered normal levels. 

"This doesn’t look like changing much over the coming year. And, of course, any further outbreak of war or conflict could see prices shoot even higher. And if we get a particularly cold winter, prices would also spike in the short term.” 

Furthermore, the most recent wholesale price index showed wholesale electricity prices in Ireland in November were 18.9% higher than they were 12 months before.

Ahead of the public going to the polls in November, many of the parties made key campaign pledges aimed at reducing household energy bills, as the cost of living was cited as one of the main factors when it came to how people voted.

One pledge was around the planned Vat hike on electricity and gas from 9% to 13.5%. 

While Fine Gael and Fianna Fáil have said they would not proceed with this planned hike, Mr Cassidy said if implemented it would mean consumers pay about €70 more per year on electricity and €60 more on gas.

“And, of course, the carbon tax goes up again next May,” he said. “That will add another €20 or so to the average annual gas bill.

“In August, the Commission for Regulation of Utilities sanctioned an increase in grid or ‘network’ fees that added the equivalent of €60 a year to the average annual gas bill and over €100 to the average annual electricity bill.

“Suppliers can choose to absorb these increased fees as part of the cost of doing business or pass them on. 

"But if these fees are increased again next year by a similar amount then it will limit suppliers’ ability to reduce prices even if wholesale prices do fall.” 

After a relatively mild Christmas week, the expected cold snap over the coming days is expected to bring temperatures as low as -4C by Thursday, according to Met Éireann.

New Year’s Day is expected to turn “very cold” in the evening, while the day is expected to be largely dry, sunny and cold.

Cork and Kerry will begin 2025 under a status yellow rain warning as Met Éireann warned of localised flooding and hazardous travelling conditions in the counties.