Electricity prices - Ireland

Electricity Market in the Republic of Ireland

Primary Generation Sources

Ireland’s power mix has shifted rapidly toward renewables. By 2023 renewables (wind, hydro, solar, biomass) supplied roughly 41% of generation. Natural gas remained the single largest source (~44%), with the remainder coming from coal/peat/oil (~5%) and net imports (~10%). For example, in 2023 the Central Statistics Office reports ~47% of metered generation from gas and 39% from wind. (Wind by itself produced about one-third of the total.) By late 2024, grid data showed renewables (mostly wind plus solar/hydro) supplying ~46.7% of demand and gas about 38% in December (see Table below).

Ireland’s clean energy expansion means renewable shares are growing. For instance, wind output alone set records in 2023–24, briefly covering over 70% of demand in good wind conditions, and solar output quintupled from 2022 to 2023. Overall, policy targets (e.g. EU 80% renewable power by 2030) and recent Climate Action Plans aim to raise renewables above 60% by 2030.

Electricity Price Formation (End-User Bills)

Electricity bills in Ireland are composed of several components:

• Wholesale Energy Cost: The base cost of electricity is set in the all‑island Single Electricity Market (SEM), where generators bid into a mandatory pool. The marginal clearing price (System Marginal Price, SMP) at each half-hour becomes the wholesale rate. This pool price (the SEM day-ahead auction price) forms the main energy charge suppliers must pay, which they typically hedge forward but ultimately pass through to customers.

• Network (Delivery) Charges: Transmission Use-of-System (TUoS) and Distribution Use-of-System (DUoS) charges recover the regulated costs of the high-voltage grid and local distribution networks, respectively. These charges are set annually by the regulator (CRU) based on allowed revenue for EirGrid (TSO) and ESB Networks (DSO). Practically, network tariffs vary by voltage and customer class (e.g. residential vs. industrial). For large business customers, there is also a Capacity Charge based on contracted Maximum Import Capacity (MIC). (Domestic customers typically pay fixed standing charges and per-kWh DUoS/TUoS rates but no capacity fee.)

• PSO Levy: A Public Service Obligation (PSO) levy is added to all customer bills to fund government energy policy (notably support schemes for renewables under REFIT/RESS). The CRU calculates the annual PSO rate (levy or credit) based on wholesale prices: when market prices are low, the levy collects funds to subsidize renewables; when prices are high, customers may even get a net PSO payment. The PSO is identical for residential and commercial users (charged per kWh) under current rules.

• Taxes and VAT: Electricity is subject to Value-Added Tax. Since May 2022, the domestic VAT rate on gas and electricity has been temporarily cut from 13.5% to 9% (extended to October 2025). This reduced rate currently applies to household energy and (as of 2025) is also applied to business energy bills. Electricity itself carries no separate carbon tax (unlike gas/oil fuels); any emissions costs are embedded in generation prices via the EU carbon market.

Overall, wholesale and network costs make up roughly 70–75% of a typical domestic bill, with the remainder from supply overheads, the PSO levy and VAT. Business customers have similar cost components (fuel, network, PSO), though they may pay the full 13.5% VAT (unless passed on) and face additional charges (e.g. capacity, demand charges). Importantly, many regulated costs (grid tariffs, market operator charges, SEMO fees, PSO) are “pass-through” items set by CRU or SEMO – suppliers generally recover these in full from customers.

Dynamic Electricity Tariffs

Definition and Purpose: A dynamic tariff (also called real‑time pricing) is a retail plan where the unit price of electricity varies in near-real time, usually by half-hour, to track the wholesale market price. In effect, every half-hour has its own rate: customers see tomorrow’s prices (the day-ahead SEM prices) and can shift flexible loads to cheaper periods. This contrasts with flat or time-of-use tariffs (fixed peak/off-peak rates); dynamic pricing more closely reflects actual system conditions. For example, low demand or abundant wind/solar on the system will translate into lower customer prices during those periods.

Mechanism: In Ireland’s SEM, day-ahead auctions determine half-hour prices for the next day. CRU has mandated that Standard Dynamic Price Contracts use these Day-Ahead Market (DAM) prices as the reference for the dynamic unit rate. (Historically DAM pricing was hourly; it will switch to half-hourly from March 2025, after which tariffs will update accordingly.) Dynamic tariffs usually comprise a fixed standing charge and a fixed base unit rate plus a dynamic component equal to the DAM price for each interval. Importantly, CRU sets a price cap for dynamic rates to protect consumers (for instance, €0.60/kWh), and suppliers must obtain explicit customer consent before switching to such a tariff.

Regulatory Framework: EU electricity market rules (Directive 2019/944) require that energy suppliers offer dynamic pricing options to customers with smart meters. Ireland transposed this via S.I. No. 20/2022 (effective Jan 2022). Under these regulations: customers with smart meters have the right to request a dynamic tariff from any large supplier, and suppliers must inform consumers of the benefits and risks. The CRU has issued detailed rules (Codes of Practice) on dynamic tariffs, including requiring suppliers to explain price volatility and to monitor market developments. In practice, the 2023 Climate Action Plan also calls for “dynamic green tariffs” – plans that incentivize using power when renewable generation is high.

Currently, most Irish consumers remain on fixed or simple time-of-use plans, and dynamic contracts have only just begun to emerge internationally. The CRU originally required large suppliers to offer a dynamic smart tariff by October 2025, but in 2025 extended this deadline to June 1, 2026 at the suppliers’ request. Thus, fully half‑hourly wholesale-indexed tariffs will become available in the coming year.

Major Suppliers and (Smart/Dynamic) Tariffs

The Irish retail market is led by a few large suppliers (Electric Ireland, SSE Airtricity, Bord Gáis Energy/Energia, PrePayPower), plus smaller firms. As of 2025, none of the major suppliers has launched a true half‑hourly dynamic tariff yet, but they offer various smart-meter plans and are preparing dynamic products. Key offerings include:

• Electric Ireland (ESB): Offers several smart-meter plans. For example, the “Smart SST (Standard Smart Tariff)” splits electricity into three blocks (Day: 8am–11pm, Night: 11pm–8am, Peak: 5pm–7pm) with lower rates off-peak. It also has specialized plans like “Night Boost” (super-low rate 2–4am) and a “Weekender” plan with free electricity on one chosen weekend day. These are fixed time-of-use rates, not real-time. Electric Ireland is expected to roll out a DAM-indexed tariff by mid-2026.

• SSE Airtricity: Its “Standard Smart Tariff” likewise has three time bands (Day, Night, Peak). The Day band (8am–11pm excluding peak 5–7pm) carries a moderate rate, Night (11pm–8am) is cheapest, and Peak is highest. SSE’s time-of-use structure is similar to Electric Ireland’s. No half-hourly variable tariff is yet sold, but SSE has stated it will introduce a real-time pricing plan in line with the new regulations.

• Energia/Bord Gáis Energy: Energia (BGE) offers peak/off-peak smart plans to its business and residential customers, with lower unit costs off-peak. (For example, they have a Winter/Day/Night split akin to others.) While Energia’s current tariffs are static blocks, the company is developing a dynamic product to meet the CRU timeline.

• PrePayPower: This supplier provides prepayment and smart plans with time-of-use rates (e.g. cheaper night and weekend rates). PrePayPower was one of the suppliers requesting the extension to June 2026. It is likely to introduce a true dynamic tariff alongside its smart offerings.

• Others: Smaller suppliers (e.g. Pinergy, Flogas Electric, etc.) also offer smart-meter options. Pinergy, for instance, has championed detailed usage insights and Time-of-Use plans with 30-minute metering. However, all are subject to the same regulatory requirements, so similar dynamic tariffs will be phased in across the board.

In summary, the 2025 Irish market features high shares of wind and gas generation. End-user prices combine SEM wholesale costs, regulated network charges and levies, plus taxes. The regulatory framework is now driving the roll-out of dynamic tariffs – contracts tied to the day-ahead SEM prices – and major providers are preparing varied products (fixed peak/off-peak vs real-time) to meet this new paradigm.

Peak and Off-Peak Hours

Ireland 2024 – Average Hourly Wholesale Electricity Price (SEMOpx)