Household energy bills could fall further in the coming months if “positive market trends” in wholesale gas prices continue and if there is a resolution to the Ukraine conflict, the ESB’s chief financial officer Paul Stapleton has said.
However, he warned the market and the geopolitical events that surround it remain volatile.
Mr Stapleton was speaking after the State-owned utility published its latest annual results, showing the company made an after-tax profit of €706 million last year, 19 per cent down on the previous year, while investing a record €2.2 billion in “critical” energy infrastructure. The company is proposing a dividend to Government of €189 million, down from €220 million previously.
Ireland relies on imported gas for approximately half its energy needs “so it is a price taker,” Mr Stapleton said. And while the ESB’s retail arm Electric Ireland, the largest Irish supplier, has reduced prices three times in the last 16 months, they are still double what households paid prior to the pandemic.
“It is volatile and uncertain but all I can say is the current trends are positive,” he said, noting “some progress or resolution on the Ukraine situation would also reassure markets”.
A recent Eurostat report indicated electricity prices here were the second most expensive in the EU and that Irish households were paying on average €355 more a year for electricity than the EU average.
Chipmaker Intel, which employs 4,900 staff in the Republic, has pinpointed the high cost of energy in Ireland as a major issue for the company.
Mr Stapleton said high energy prices here reflected Ireland’s reliance on imported gas and higher transmission costs linked to the dispersity of population but the roll-out of offshore wind energy projects had the potential to be a game-changer.
“The high prices and the impact on competitiveness is ultimately down to our dependence on fossil fuels ... the big game-changer from an Irish economy perspective will be the onset of offshore wind,” he said, noting the projects should start delivering by the end of the 2020s.
In its latest annual results, the ESB noted turnover for 2024 was €7.25 billion, down from €8.8 billion in 2023.
It said that 2024 was another year of record levels of capital investment in critical infrastructure with over €1.8 billion capital expenditure directly incurred and almost €400 million advanced to joint ventures for infrastructure projects.
ESB Networks is planning to more than double the scale of investment in the network over the next five years.
The company said the reduced level of profitability from generation and trading in 2024 was “due to lower gross margins (in both Ireland and Britain) “.
Mr Stapleton described the figures as a “solid performance” when taken against the backdrop of the changing market.
He said the recent extreme weather events highlighted the need to further invest in the reliability of the network and renewable energy sources. “ESB Networks plans to more than double the scale of investment in the network over the next five years and NIE Networks will have a similar increase in Northern Ireland,” he said. “This investment is only possible if ESB maintains profitability and a strong credit rating to support an increase in borrowings.”
