Network costs account for 29% of the domestic consumer’s bill in Ireland. This compares with 21% in Germany, 23% in the UK and 19% in Denmark.
Setting taxes and levies aside and comparing the UK, Ireland, Germany, and Denmark we find that network costs (transmission and distribution), as a proportion of energy and supply costs, are lowest in the UK (around a third), one and half times higher than the UK in Ireland (around a half), three times as high in Germany (85%) and four times higher than the UK in Denmark (124%). While the relative share of network costs is also dependent upon access to and the cost of primary energy in these countries, on the face of it, Ireland’s network costs as a proportion of energy and supply costs do not appear to be high compared with the rest of Europe, but they have risen year-on-year in Ireland. The main reason for the rise is the continued investment in the transmission and distribution systems and in delivering ongoing infrastructure projects to allow for the continued roll-out of necessary infrastructure.
While rising network costs are an increasingly important factor in electricity prices in Ireland, the main reason for Ireland’s relatively high price of electricity lies in the area of energy (generation) and supply.
ESB has provided an analysis of its business where end-user prices are decomposed into six elements. In the figure below the cost of electricity generation is seperated into generation and and fuel costs. Thus the largest component of end-user prices is the cost of fuel (29%) followed by Network costs (28%), Taxes (19%) and supply costs (14%).