Introduction
Your tariff includes the cost of generating electricity, transmitting it through the electricity network, distributing and supplying to end customers.
What Drives the Price of Electricity?
Suppliers' Tariffs
Deregulation of Electricity Tariffs
What drives the price of electricity?
At a high level, the price of electricity in a customer's bill is made up of four key cost components:
- The cost of Generation from power plants, which currently accounts for well over half of the price of a customer's bill; Ireland's electricity comes from a variety of generation plants consisting of coal, oil, gas, peat and, in recent years, an increasing amouint of reneweable generation mostly in the form of wind power. Gas is the dominant fuel in Ireland, with in the region of 60% of our electricity currently generated from imported natural gas.
- The costs of Networks, which involves sending the electricity from the generation plants through the Transmission and Distribution wires to customers' premises. This accounts for about one-third of the final proce of electricity;
- The Retail activity and costs for a supplier include the cost of procuring energy and customer accounting;
- The Public Service Obligation Levy is a Government initiative related to putchasing certain required forms of electricity generation such as wind power of peat.
In recent years changes in the cost of electricity have also been impacted by the rising global fuel prices of gas, coal and oil over the past number of years. These costs and additional costs attributed to carbon emission costs and Public Service Obligations are recovered from all customers via electricity charges.
Suppliers' Tariffs
The Commission does not regulate the tariffs of electricity suppliers. Different suppliers may offer different costs for the electricity consumed.
The Commission recommends that you shop around and consider all offers available to you to make sure you are on the best tariff for you.
You will find more information on how to switch supplier here.
Deregulation of Electricity Tariffs
Until 2000, ESB Customer Supply was the only electricity supplier in the Republic of Ireland. This meant that when the electricity market was opened to competition ESB Customer Supply had the advantage of serving all existing customers. In order to allow competition to develop and to ensure fair prices for consumers, the Commission reviewed and approved ESB Customer Supply tariffs from 2001-2010.
In 2010, with significant growth in competition, the Commission made a decision to stop regulating prices charged by ESB Customer Supply fully, provided a number of conditions were met. These were:
1. It held less than 60% of the domestic electricity market
2. There were two independent suppliers operating in the domestic electricity market holding at least 10% market share
3. ESB supply companies were rebranded to avoid customer confusion about the role of the supplier and ESB Networks company.
The market share targets were reached early in 2011. ESB Customer Supply and ESB Independent Energy are being rebranded as Electric Ireland, with a period of dual branding until December 2011.
From April 2011, the Commission has stopped regulating and approving charged by Electric Ireland. We will continue to monitor the electricity market to ensure that customers are protected appropriately and are benefiting from competition.