Irish households pay €202 a year more than Europeans for light and heat as country continues to rely on fossil fuels

IRISH households are paying around €202 a year more than our European neighbours for their light and heat needs.

Only German, Belgian and Danish customers pay more, while prices plummeted in 14 EU countries last year.

One reason for the higher prices here is Ireland’s continuing reliance on fossil fuels for our electricity needs.

The country is moving away from the likes of coal to generate our fuel and is on course to be 70 per cent renewable (wind and solar) by 2030.

What can we as consumers do to play our part in going green?A lot of electricity in Ireland is still generated by burning gas, coal and peat and a lot of this is imported.

Because we are an island on the edge of the Atlantic, there’s an added cost in getting it here. Fossil fuels can also be highly volatile in price.

What’s more, although our level of renewable energy has increased hugely over the past decade, and now accounts for over 30 per cent of the electricity we generate, it’s still slightly more expensive to produce than non-renewable energy, most experts say.

Per head of population, we need more high voltage wires, pylons and electrical lines than in many other countries in order to have a safe and secure supply of electricity, which puts upward pressure on the price of electricity too.

The increasing investment that’s needed in the national grid to handle more renewable energy is also putting upward pressure on prices.

Which energy suppliers are doing the most in terms of investment in sustainable energy? Is it hard to switch?

Nearly all suppliers claim to supply green electricity and they’re all trying to do their bit but it’s important households realise how the electricity market works.

Our electricity network is made up of the transmission network (or grid) and distribution network.

The operator of the national grid is EirGrid while ESB networks distributes electricity from the national grid to homes and businesses.

Every household in Ireland has access to the same national grid and infrastructure no matter who supplies their electricity.

And about 70 per cent of our electricity still comes from burning fossil fuels, and a small amount of oil. So you’re using this no matter who your supplier is.

Some supplies do generate their own electricity, which they feed into the national grid.

For example SSE Airtricity operates 28 onshore wind farms throughout Ireland. So customers of SSE are helping to support these.

However, the simple fact is that everyone’s electricity in Ireland ultimately comes from the same place.

The other point is that suppliers can buy a Guarantee of Origin (GO) certificate to help label their energy green.

A GO guarantees that one MWh of electricity has been produced from renewable energy sources.

Electricity suppliers can buy and trade GOs at a European level to certify that their non-renewable electricity is covered by renewable energy that has been produced elsewhere.

So it’s a bit like a Dublin-based coal-fired plant spending money to say its electricity is green based on excess energy produced on a wind warm in Germany.

It’s all legal and above board but I’m not sure it’s what customers might think they’re signing up for

Households choosing a ‘green’ energy supplier isn’t really going to change our level of emissions - that depends on the fuel mix being used at a national level. And it’s really Government policy that has to drive this.

Will I pay more to go with those suppliers?

Green deals tend not to be much more expensive than non-green deals. But one could argue about the merits of some of these deals.

Do other suppliers make sustainability claims they can’t really back up?
I think there’s a lot of misinformation out there.

Not just in energy but across all areas of business. People just need to understand what they’re signing up to.

My fear is someone might sign up to a green energy deal and then think they don’t need to worry about using less energy around the home because it’s all ‘green’. As I’ve said, that’s not the case.

When I pay my electricity bill, does all the money go to the supplier?

You’d be surprised at how little. On a €100 bill, around €20 goes to the Government in tax.

Around €40 goes on the cost of generating the electricity — the coal, gas and peat etc.

And around €30 goes on the use and management of high voltage wires, pylons and lines that transport electricity around the country and into people’s homes.

All suppliers must pay EirGrid and ESB Networks tariffs for this, and ultimately these are passed to customers.

The rest - around €10 or so - goes to the supplier.

As Ireland heads towards 70 per cent renewables, will that hit me in the pocket? Or can I expect prices to go down during this decade?

Green energy is good for the environment but it’s not necessarily good for the pocket. At least not yet.

A huge investment is needed in the national grid to help us reach that target.

The current grid doesn’t have the capacity for all the wind energy we intend on adding over the next few years and without getting too technical, fossil fuel and renewable energy don’t mix that well.

An investment figure of up to €2.5billion has been given for making the grid ready.

It’s extremely likely this money will simply be passed on to consumers in the form of higher distribution and transmission charges.

We’re already seeing this.

The other point is renewable energy is volatile — we can’t tell very far in advance how windy or sunny it’s going to be.

As a result, back-up power plans from fossil fuels are still needed.