Irish home energy bills could rise €220 per year to meet renewable energy targets

24 May 2017

Image: Matt Kay/Shutterstock

Irish households could see a rise in energy bills by €220 in the years to come, in order to meet renewable energy needs. It could be our best option.

While countries such as Germany celebrate new records of renewable energy generation, Ireland is still playing catch-up in many respects.

A report last April found that despite being given a special dispensation for its greenhouse gas reduction targets set out by the EU, Ireland is way off where it needs to be.

€220 versus €510

Now, a new report from PwC – looking at how Ireland can transition itself to a low-carbon economy in the fastest time possible – has found that rising wholesale costs of electricity will be unavoidable.

By its estimates, the increase will be as much as 11pc between 2016 and 2050 compared to today, equating to an increase of €220 per household each year.

However, its analysts believe that this will be substantially lower than if we were to continue on the same path, with predictions in this case suggesting that each household would pay €510 per year in a high-carbon economy.

By the time 2050 rolls around, it is estimated that the cost of energy per unit of GDP would be approximately 25pc lower than today, in a decarbonised economy.

This will be no easy feat, as a national retrofit programme would need to be undertaken to achieve this. With each house retrofit expected to cost in the range of €30,000, such an endeavour would cost the State €25bn between 2016 and 2050.

Sales of fossil fuel cars banned by 2030?

Further recommendations were made about Ireland’s transport emissions, which will need to be drastically reduced by 2050.

A 94pc reduction in fossil fuel-powered vehicles will need to be achieved either through the mass adoption of electric vehicles (EVs) or using biogas fuel for commercial vehicles.

While Ireland’s current number of EVs remains small in comparison with other European states such as Norway, PwC said the cost of switching to electric will be “limited” as “adoption is only projected to take place once EVs reach price parity with traditional petrol/diesel cars from 2025 onwards”.

To boost EV numbers in Ireland, it is suggested that from 2025, further tax breaks for EVs and plug-in hybrids should be introduced, and that these vehicles should be allowed to use bus lanes and avail of free parking.

By 2030, a congestion charge should be brought in to Ireland’s major cities, with additional emission-free zones rolled out across the country.

Finally, post-2030, a full ban on the sale of internal combustion engine cars should be introduced in cities.

Government response

Speaking about the report, Sean Kyne, Minister of State at the Department of Communications, Climate Action and Environment, said:“The Government is fully committed to achieving a low-carbon economy whilst maintaining energy security, a competitive economy and a safe environment for all.

“Increased cross-governmental thinking is already happening and will indeed be required to implement a range of solutions along the way if Ireland is to avoid high costs.”

Colm Gorey was a senior journalist with Silicon Republic