Are Energy Bills Staying High? What to Expect in 2025
Despite recent price cuts from energy suppliers, households in Ireland face a grim outlook for 2025. Energy bills are likely to remain high, regardless of fluctuations in wholesale gas and electricity prices.
The Current Situation
While electricity prices have decreased over the past year, consumers are still paying substantially more than pre-pandemic levels and significantly higher than the EU average. A recent Eurostat analysis revealed that Irish households are paying €355 more annually for electricity compared to the EU average.
This translates to a total of €500 more per year for both electricity and gas compared to other EU countries.
Expert Warnings
Daragh Cassidy, head of communications at price comparison platform Bonkers.ie, warns that reaching the end of 2025 with prices at current levels would be considered a positive outcome. He states, “We definitely won’t return to the prices we saw before the war in Ukraine any time soon.”
Cassidy emphasizes the “tough headwinds” that could push energy bills even higher in 2025. He cautions, “At the moment, I wouldn’t be betting on any further big price decreases any time soon, unfortunately.”
Factors Driving High Prices
Cassidy points to several key factors contributing to the continued high energy prices:
- Wholesale gas prices remaining more than double pre-crisis levels, with no immediate signs of improvement.
- The risk of further conflict escalating global energy prices.
- A cold winter potentially leading to short-term price spikes.
Furthermore, recent data shows wholesale electricity prices in Ireland were 18.9% higher in November 2024 compared to November 2023.
Policy Implications and Future Outlook
With energy costs a major concern for voters, many political parties made promises during the recent election campaign to alleviate the burden on households. One key pledge was to shelve the planned increase in VAT on electricity and gas from 9% to 13.5%. While Fine Gael and Fianna Fáil have committed to not enacting this increase, Cassidy warns that if implemented, it would add €70 to annual electricity bills and €60 to gas bills.
Adding to the strain are increases in carbon tax and grid or “network” fees, further limiting suppliers’ ability to reduce prices even if wholesale prices decline.
Cold Weather Expected
Adding to the financial pressure facing households, Ireland is bracing for a cold snap over the coming days, with temperatures potentially dropping as low as -4°C by Thursday. New Year’s Day is also expected to be very cold.
Cork and Kerry are currently under a status yellow rain warning, increasing the risk of localized flooding and potentially hazardous travel conditions.
Manage your Energy Bills
With energy costs likely to remain high, managing your energy consumption is crucial. Explore options like comparing energy providers, switching to a more energy-efficient tariff, and adopting energy-saving practices at home. Use Bonkers.ie for resources and tools to help you secure the best energy deals and.
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