Irish consumers are paying around €800 more a year for electricity than the EU average. Household electricity costs are the highest in the European Union. And behind this scandal lies a sorry tale of privatisation.
Originally, Ireland had one of the cheapest electricity prices for domestic users. This was because the publicly owned ESB had a not-for profit mandate.
Two key moves brought about a change.
First, in 1996, the EU issued a directive to ‘unbundle’ electricity. This meant breaking up the state-owned electricity entities into different companies for producing, transmitting, and supplying electricity. It was supposed to lead to more competition. But in a small country like Ireland it was a particular disaster.
Then in 2001 the Electricity (Supply) (Amendment) Act 2001, radically changed the mandate and remit of the ESB to a for-profit mandate.
The end result of market liberalisation was that between 1994 and 2014, average consumer electricity prices in the EU-15 increased by 40%, from 0.1020 €/kWh to 0.1429 €/kWh. In Ireland, they increased by an incredible 267%, from 0.0751 €/kWh to 0.2008 €/kWh. Irish electricity prices are currently 49% higher than in France, where over 90% of the market is dominated by state-owned or backed entities.
If we want cheaper electricity prices, we need to reverse the moves to privatisation. That means returning ESB to a not-for-profit mandate and stopping subsidies for private companies.