The argument that Ireland’s high costs are primarily due to low population density is a common oversimplification. While Ireland is rural, countries like Finland and Sweden have significantly lower population densities and more challenging geography, yet they consistently maintain lower residential and industrial electricity prices. The issue isn't where the people live. It's the gold-plating of the network. Ireland’s regulatory framework allows EirGrid and ESB Networks to pass massive capital expenditure costs directly to the consumer with guaranteed returns, leading to a build-at-any-cost mentality that density doesn't justify.
The claim of "previous underinvestment" ignores the massive capital outlays of the last decade. Ireland has actually seen massive investment in its grid to accommodate renewables, but the efficiency of that spend is questionable. We have a "constraint payment" system where we pay wind farms not to produce power when the grid is congested. In 2023 alone, these payments reached hundreds of millions of euros. This isn't "underinvestment". It's an operational failure to align generation with grid capacity, a cost that is hidden in the consumer's bill.
You suggest that "saving the world harder" (more renewables) would have lowered prices. This ignores the Marginal Pricing Model. In the Single Electricity Market (SEM), the price of electricity is set by the most expensive generator needed to meet demand - which is almost always a gas-fired plant. Therefore, even if wind provides 80% of the power at a given moment, consumers often still pay the "gas price" for all of it. Adding more renewables without reforming the marginal price auction system does nothing to lower the immediate cost to the consumer. It just increases the profit margins for renewable operators.
I should also comment on the source of that report: Nevin Economic Research Institute (NERI). NERI is not a neutral academic body. It is the research arm of the Irish Congress of Trade Unions (ICTU). NERI’s research is fundamentally rooted in Social Democratic and Labor-centric economics. Their reports consistently advocate for increased public spending and state intervention. By focusing on "underinvestment" and "network costs," NERI shifts the blame away from the policy failures of the green transition and toward a narrative that justifies more state-led infrastructure spending. They often downplay the impact of aggressive carbon taxing and the "Public Service Obligation" (PSO) levy, which are direct policy choices that have inflated Irish bills compared to the EU average.
Finally, the "poor connections to neighbors" argument is becoming obsolete. With the Greenlink and Celtic Interconnector (to France) coming online, Ireland is becoming one of the most strategically connected islands in Europe. If isolation were the primary driver, prices should be falling as these projects near completion. Instead, they remain the highest in the EU (often 40-50% above the average). The "island" excuse is a convenient shield for domestic policy inefficiencies.
The claim of "previous underinvestment" ignores the massive capital outlays of the last decade. Ireland has actually seen massive investment in its grid to accommodate renewables, but the efficiency of that spend is questionable. We have a "constraint payment" system where we pay wind farms not to produce power when the grid is congested. In 2023 alone, these payments reached hundreds of millions of euros. This isn't "underinvestment". It's an operational failure to align generation with grid capacity, a cost that is hidden in the consumer's bill.
You suggest that "saving the world harder" (more renewables) would have lowered prices. This ignores the Marginal Pricing Model. In the Single Electricity Market (SEM), the price of electricity is set by the most expensive generator needed to meet demand - which is almost always a gas-fired plant. Therefore, even if wind provides 80% of the power at a given moment, consumers often still pay the "gas price" for all of it. Adding more renewables without reforming the marginal price auction system does nothing to lower the immediate cost to the consumer. It just increases the profit margins for renewable operators.
I should also comment on the source of that report: Nevin Economic Research Institute (NERI). NERI is not a neutral academic body. It is the research arm of the Irish Congress of Trade Unions (ICTU). NERI’s research is fundamentally rooted in Social Democratic and Labor-centric economics. Their reports consistently advocate for increased public spending and state intervention. By focusing on "underinvestment" and "network costs," NERI shifts the blame away from the policy failures of the green transition and toward a narrative that justifies more state-led infrastructure spending. They often downplay the impact of aggressive carbon taxing and the "Public Service Obligation" (PSO) levy, which are direct policy choices that have inflated Irish bills compared to the EU average.
Finally, the "poor connections to neighbors" argument is becoming obsolete. With the Greenlink and Celtic Interconnector (to France) coming online, Ireland is becoming one of the most strategically connected islands in Europe. If isolation were the primary driver, prices should be falling as these projects near completion. Instead, they remain the highest in the EU (often 40-50% above the average). The "island" excuse is a convenient shield for domestic policy inefficiencies.