# So just why are Irish energy prices so high ?



## olddog (6 Mar 2009)

I've seen people post that Irish energy prices are high in global terms.

Is it true I wondered ? ( after all the services by-in-large work which is useful and worth paying a bit for )

Thinking in terms of a similar country to compare with Ireland I decided on New Zealand.

Google.co.nz brought me to a number of companies offering electricity and natural gas to the domestic market

Pricing for electricity is circa  NZD 0.20 / kWhr day or night ( i.e. anytime with reductions available for off peak use only )

Pricing for gas is circa NZD 0.06 / kWhr ( day or night )

At present one Euro buys 2.5 NZD

So the comparative prices are

..............................................New Zealand.............Ireland

Electricity Euro/kWhr ......................0.08c...................0.19c

Natural gas Euro/kWhr.....................0.024c..................0.054c


Even allowing for the expected 10% - 12% reduction in the Irish prices in April it is clear that Kiwis pay about half of what Paddys pay

I think that the energy regulator has some explaining to do.

What do you all think ?


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## Fnergg (6 Mar 2009)

The Kiwis produce their own natural gas whereas we are heavily dependent on imports and we are at the farthest end of the European gas pipeline. I think that is the main reason why the price differential is so large.

As regards electricity prices, the main reason we are higher than many countries is down to the generation mix. We are highly dependent on fossil fules for electricity generation - one of the highest dependencies in the European Union: near to 90%. The price of fossil fuels is externally determined and has risen dramatically in the last 12 years. Other countries almost equally dependent - and similar pricewise - as us are Italy, Greece and The Netherlands. France by contrast, with their huge nuclear generation portfolio, has the cheapest electricity in Europe.

In New Zealand 65% of their electricity is generated by water followed by gas (16%), coal(9%), geothermal (6%) and wind and other (4%). We ain't got the beautiful mountain ranges and raging rivers of NZ and so our hydro-genration percentage is only about 1% of the total.

The Irish population is also very widely distributed and the cost of bringing electricity to scattered rural populations is much higher than doing so for concentrated urban populations. We may be similar to NZ on this front but we are the exception in European terms.  

The electricity networks also received a much needed upgrade over the last 10 years and the cost of this has to be factored into the price as well.

So, should we build a nuclear power station and benefit from the lower electricity prices like France? Apart from the environmental/political objections the cost would be prohibitive. (And, personally, the prospect of Christy Moore composing another anti-nuclear ditty like he did when Carnsore Point was being mooted as a nuclear power site back in the seventies would be a price too high to pay). We would only need one for our small population and the cost and lead-in time would be excessive. Better instead to build an interconnector across the Irish Sea and import supply from the British, supply generated in part by their next generation of nuclear power stations. That is the plan. It's an Irish solution to an Irish problem but it makes sense. 

Regards,

Fnergg


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## Mpsox (6 Mar 2009)

Probably doesn't help that ESB staff costs are horrendously high. Not sure of the exact figure but I thought I read somewhere recently that the average salary there was €70k+


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## Fnergg (6 Mar 2009)

Mpsox said:


> Probably doesn't help that ESB staff costs are horrendously high. Not sure of the exact figure but I thought I read somewhere recently that the average salary there was €70k+


 
The main factor in electricity prices is generation costs. The share of the Irish electricty generation market held by ESB is 38%. 

Yes, you read that the average ESB salary is €70k. I recently read in an American supermarket tabloid that Elvis is alive and gigging with Buddy Holly in a South Seas island. It must be true as I believe everything I read in the papers. 

Regards,

Fnergg


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## bamboozle (6 Mar 2009)

Fnergg said:


> The main factor in electricity prices is generation costs. The share of the Irish electricty generation market held by ESB is 38%.
> 
> Yes, you read that the average ESB salary is €70k. I recently read in an American supermarket tabloid that Elvis is alive and gigging with Buddy Holly in a South Seas island. It must be true as I believe everything I read in the papers.
> 
> ...


 
believe the average ESB Salary is closer to 75k
was it a pwc report in 2007 on the poolbeg station which showed average salary there to be over 140k


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## soy (8 Mar 2009)

We also have the farcical situation whereby the regulator has consistently increased the cost of electricity in order to bring competition into the electricity supply market. The idea seems to be that you raise the price of electricity to the point that it is so profitable that competitors enter the market.
It would have been a lot better to meet the EU competition requirements by splitting the ESB into 2 competing companies.


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## werner (8 Mar 2009)

Another reason why Ireland energy prices are so high is because each unit of power you pay for has a portion to pay for  Minister Eamon Ryan squandering of tax payers money on useless wind farms. He has increased subsidies for off-shore wind from €57 to €140 per megawatt hour.

Screwing the tax payer by subsidising a next to useless energy generating project of Wind Turbines! They are one of the worst forms of so called renewables. They are needer Green or clean due to their hidious environmental impact, collossal generation of Co2 by the massive amounts of cement used for installation and the network that has to be installed to make use of their next to useless variable power output.

The best wind turbine system in the world is in Denmark, at it's very best its only 20% to 25% efficient

Standby fossil fueled power plants must be kept burning fuel all of the time to balance the electricity load as wind power is so variable.

On the rare days the turbines generate 100% power, Denmark then as Ireland will, has to export its excess electricity to adjacent countries at a huge loss to the tax payer.


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## z103 (8 Mar 2009)

werner - what would you think is the best form of renewable energy?


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## colm5 (9 Mar 2009)

The sole reason for high energy prices is, and I know it sounds crazy, to bring competition into the energy market. We are such a small market that energy prices needed to increase dramatically to attract producers.

Yes, we all got screwed.

Generating costs etc.. effect it, but do not contribute significantly. Other countries have to generate it too..

It is a myth to say nuclear power is 'cheap', in reality the costs are unknown.


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## olddog (9 Mar 2009)

Fnergg said:


> The Kiwis produce their own natural gas whereas we are heavily dependent on imports and we are at the farthest end of the European gas pipeline. I think that is the main reason why the price differential is so large...........




Natural gas is traded internationally. 

I very much doubt that the generators buy it at much less than the international rate otherwise it would be exported from New Zealand as LNG.

With regard to Ireland being at the 'farthest end of the European gas pipeline' what sort of price reduction should we expect to see when Shell get into production on the west coast ?


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