ICT Ireland concern at high energy costs for tech sector

28 Aug 2006

ICT Ireland has sounded a warning over the rising cost of doing business in Ireland as new research has revealed that the total energy bill for companies here jumped by a massive €1bn over the past three years.

According to data from IBEC, Irish businesses have seen energy costs rise by more than 30pc from 2003, from €3bn to €4bn. Gas prices showed the highest increase at more than 50pc over that time, followed by diesel oil (40pc) and electricity (around 25pc).

Following the publication of these findings, Ireland’s major high tech employers said that unless the Government takes “urgent action”, the rising inflation and business costs could lead to some difficult years ahead. ICT Ireland, the IBEC group which represents the major high tech employers here, pointed out that while domestic service providers could pass on costs to customers, this was not an option for companies trading internationally.

Kathryn Raleigh, a director with ICT Ireland said: “The cost of doing business has increased dramatically in the last few years and will be made worse by recent energy price hikes. The government has failed to come forward with any meaningful plan to deal with the problem. Industry has been waiting for years for the government to publish a comprehensive energy strategy and is still waiting.”

Raleigh called on the Government to show leadership and said that it should immediately publish a National Energy Policy and introduce real competition in energy provision. She claimed that the current model of market liberalisation had seen “very limited competition”, resulting in significant damage to national competitiveness.

She called on the government to include provisions for a special industry fund to promote energy efficiency in the budget later this year.

Although there have been recent investments by multinationals in Ireland, the country can not afford to be complacent over the energy issue, Raleigh said. “With cost rising at such a rate, we run the risk of eroding our competitive position and losing our attractiveness as a location of choice for mobile investment,” she cautioned. “There are many global locations that benefit from a much lower cost base, and cost factors are constantly reviewed by global head offices.”

By Gordon Smith