Energy companies are trying to have their cake and eat it
ISME has welcomed the announcement by EirGrid and ESB Networks of major investment to upgrade Ireland’s electricity grid, but has warned that the cost of this investment must not be passed on to already hard-pressed businesses and households through higher energy prices.
Eurostat data consistently show Ireland has either the highest or second-highest energy prices in the European Union. SEAI figures also show that the largest component of Irish energy prices is the cost of the energy itself, not network charges, with little transparency around why Irish prices remain so far above EU norms.
ISME also said investment in energy infrastructure is essential if Ireland is to remain competitive for foreign direct investment, support indigenous enterprise and meet the needs of a population heading towards six million.
Neil McDonnell, Chief Executive of ISME, said: “Irish businesses and consumers have been paying among the highest energy prices in Europe for years while energy companies have been making huge profits, with little or no infrastructure investment in return. We cannot have a situation where Irish SMEs are paying increased energy prices for infrastructure upgrades while energy company profits are unaffected, and energy pricing remains opaque and uncompetitive by European standards. Energy companies want to have their cake and eat it by keeping huge profits but paying nothing towards improving infrastructure.”
ISME maintain that there is more than enough margin within current pricing to ensure that unit energy prices do not increase. The organisation also noted that network tariffs already account for approximately 25% – 30% of an average electricity bill, and that businesses in energy-intensive sectors such as retail, hospitality, manufacturing and construction are increasingly constrained by high fixed costs they cannot avoid or shop around.
The association also warned that future energy policy must ensure that investment in infrastructure delivers resilience and lower costs over time, rather than locking in permanently higher prices.
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