Want to see an end to high electricity prices? This is what we need to do
Prices remain high because we are still burning so much gas. The cheapest way to end that is to deliver the onshore and offshore wind that is ready to be built
Electricity prices have to come down. We need that to happen so we can help Irish households pay their bills and businesses to maintain their competitiveness, which is threatened by volatile and high energy costs. We also need prices to fall to help us meet our climate targets. The electrification of transport and heating systems will be vital in this regard and we need a good gap between the cost of electricity and the fossil fuel alternatives to help drive the switch.
The issue is going to be centre stage in the upcoming budget debate, as the energy credits introduced at the time of a massive spike in gas and electricity prices at the start of the war in Ukraine come to an end. While prices have fallen some 75 per cent since that peak in 2022, they still remain historically high. Those energy credits could only ever be a temporary support. The exchequer cannot indefinitely cover bills that are above the international norm. What we need to do now is to focus on measures that will bring prices down on a permanent basis.
The good news is that lowering the cost of power is within reach and is perfectly achievable, given consistent political support and more effective delivery by our public service. The path requires investment in renewable power and in flexible grid systems, as set out in the climate action plan 2025 and in EirGrid’s Shaping Our Electricity Future roadmap, which was subject to extensive public consultation.
We have the necessary resources, legislation and finances to make it happen. The only risk is that we now hold back, being distracted by misinformation from those who see this transition as part of some wider cultural and ideological war.
The first thing we have to be clear about is the cause of the problem. Our prices are high primarily because we are still burning so much gas to meet our electricity needs. The cheapest way of cutting out the gas is to deliver the onshore and offshore wind that is ready to be built, and advance the solar and battery storage revolution that is already taking hold.
To those who argue that nuclear and especially new small modular reactors (SMRs) should be part of our clean energy future – well that’s fine, but you can forget about lowering electricity prices at the same time. Even the most ardent nuclear enthusiasts acknowledge that SMRs will not become available in any sort of volume until well into the next decade and even then the price will likely be more than double the renewable alternative.
We will, of course, be importing more nuclear power from both the UK and France through the new electricity interconnectors that are now coming online. That is a good thing, which will help us to lower prices here. Going further and building our part of a new European supergrid, along with allowing easier trading across borders, will be the best long-term measures to improve the competitiveness of all countries.
We can start now by going ahead with the North South Interconnector between Meath and Tyrone, which has been in planning for some 20 years and is finally ready to go. At the same time, we should advance two new interconnectors planned between Ireland and the UK which we know we can build quickly.
The time it takes to get through planning is another reason why things are so expensive here. It was fascinating to sit in on the recent Supreme Court hearings on the Coolglass wind farm case, which was considering the obligation on State planning authorities to help meet our climate goals. The recent slowdown in planning decisions is the main reason we will be a few years late in delivering the renewable power that will lower the cost of electricity.
At one point during the hearings a lawyer for An Coimisiún Pleanála asked – almost plaintively – “What were we to do?” In my head the answer was clear: you have to adhere to our climate law, which requires public bodies who are not helping us meet set objectives, to then adjust their ways, so we all get back on track with the climate action plan.
The same advice goes for those who have responsibility for delivering the balancing capability that is needed to keep costs down in a renewables dominated electricity system. We should fast track the private wires legislation which is currently before the Oireachtas and allow battery, wind and solar power to be built together on hybrid sites. EirGrid and ESB also need to modernise their dispatch systems so the potential of all our batteries, ranging from those in power plants down to those in the home, can quickly come into play.
This is not rocket science and the truth is we have already shown how we can be good at this new clean industrial revolution. We also have a real motive: this is the best way to bring down our high prices. It is one of the first steps in making sure this is a just climate transition.