Electricity prices to come down as 'green levy' to be halved under plan.

Consumers look set to benefit from a reduction on the levy on their electricity bills.

The Commission for Regulation of Utilities has proposed a halving of the public service obligation levy to €23.04 for the 2019 to 2020 period.

When VAT is included the regulator is proposing the levy goes from €47.40 a year to €26.15.

It comes after all the main suppliers raised their prices.

This country had the fifth highest rise in electricity prices in the European Union in the second half of last year.

Electricity prices here are the fourth highest in the EU.

The public service obligation (PSO) levy was introduced in 2010, mainly to support the renewable energy sector in Ireland.

For many years, renewable energy was more expensive to produce than non-renewable energy so the proceeds from the levy were needed to support and subsidise the sector and make producing renewable energy viable for suppliers.

But over the past two years, the price of renewable energy has become more competitive and the price of non-renewable energy more expensive.

This means a lower subsidy is now needed, according to Daragh Cassidy of price comparison site Bonkers.ie.

The levy was as high as €92 in the 2017-2018 period.

Mr Cassidy said the lowering of the levy is also because energy prices overall have risen.

"While it's good news that the levy is proposed to decrease, it's somewhat of a hollow victory for consumers as a main reason for the reduction is the large increase in energy prices that we've seen over the past few years," Mr Cassidy said.

Last year, all the major suppliers increased prices by rates well in excess of inflation.

The carbon tax is due to increase in the next Budget, which means any positive impact on consumers' wallets may be short-lived. There is no carbon tax on electricity, but it is applied to gas and to home-heating oil.

Meanwhile, this country had the fifth highest increase in household electricity costs in Europe during 2018, according to figures from Eurostat.

Household electricity costs here are the fourth highest among the 28 member states.

Electricity prices in Ireland rose by 7.8pc over the last year.

Household electricity remains cheapest in former Soviet bloc countries that are now members of the EU.

Increases were highest in Cyprus, with a rise of 19.6pc.