Higher electricity bills could be on the way in next two years
CONSUMERS will be facing higher electricity bills by 2017, the Economic and Social Research Institute (ESRI) has warned.
The Irish electricity market is undergoing a major redesign to comply with new EU rules on electricity trading, which will have a knock-on effect for customers. The ESRI says Ireland’s capacity for advance trading, or connecting to cheaper markets, in Europe is limited.
“Regulation of generators’ bids will become more challenging under the new design, and costs and prices will be less transparent,” the ESRI said. “All of this is likely to have consequences for electricity consumers.”
Muireann Lynch, one of the authors, said that the research indicates that the Irish market has several features that render it unique compared with other European electricity markets.
“These include a concentrated market with a dominant firm, high levels of wind generation, low levels of interconnection with Great Britain, which is in turn poorly interconnected with the rest of Europe,” she said.
“Advance trading and interconnection are two of the main ways of ensuring competition in electricity markets, but their impact is severely limited in the Irish case.”
It recommends that the regulator should require supply companies to publish their margins to encourage competition and the dominant firm should face increased regulation.
OneBigSwitch.ie has called on the Government and the energy regulator to heed the ESRI’s warning.
“Irish consumers cannot be expected to shoulder the burden of a new market system when we already pay the highest rates for electricity,” said Sarah Ryan, director of campaigns.