Electricity price hikes: What’s happening and what can you do about it?

2022-04-13

The recent surge in energy costs has taken centre-stage in conversations about the rising cost of living. Oil and gas prices are soaring across Europe since Russia’s invasion of Urkaine, causing major energy suppliers like Bord Gáis, Energia and Electric Ireland to increase their prices. As a result, the Government is implementing strategies to alleviate the pressure on consumers; and in turn, consumers have to re-assess their energy use to minimise the sting of the price increases.

What’s the cause?

Without getting into the intricacies of climate change and renewable energy, it is worth noting that the impact of increased energy prices on the cost of living is a clear indicator that Ireland is still too dependent on fossil fuels.

In recent years there has been an increase in the use of renewable energy sources, however, approximately 50% of our electricity is still generated from burning gas, coal and oil. The reliance on fossil fuels puts households in a tough position because when international prices go up (as they recently have), so do household electricity bills.

It has been proposed that the drive towards renewable energy should be accelerated and the Government is looking at ways to tackle the issue. In the meantime, the Minister for the Environment and Transport, Eamon Ryan TD, has confirmed that the Government is going to reduce dependence on oil, coal and gas and rely on green energy as an alternative.

Electricity credits

A short-term measure the Government is currently implementing to ease the impact of surging electricity costs, is a once-off €200 electricity credit announced earlier this year. The credit will automatically apply to all households and is said to continue over the months of April to June, depending on a household’s billing cycle.

While the €200 credit is a welcome reprieve, in the bigger scheme of things, it does not make a huge difference. The estimated average costs households can expect to pay between €1,461.68 to €4,144.99 per year; the €200 credit only covering a fraction of that cost.

Time-of-day pricing

In a further effort to limit the impact of rising energy costs, Mr. Ryan recently announced that the Government is considering implementing time-of-day pricing. This is a system whereby electricity prices are lower during times of the day when electricity demand is less – usually later in the evening.

It is already available to households with smart meters and there are calls to put users on mandatory time-of-day tariffs. The benefit of time-of-day pricing is that you save money by using high-energy appliances when there is less demand and cheaper rates apply. Therefore, households would have some control over their electricity bills because efficient use will result in lower costs.

DIY Solutions

As we wait for the Government’s long-term strategies to address the problem, consumers have to take their own measures to get some relief.

Home Improvements

One way of saving on your energy costs is through home improvements. Installing solar panels, floor and wall insulation, or upgrading your boiler, can reduce your energy bills substantially. Lenders offer home improvement loans specifically for people who want to make energy upgrades to their home. There are also grants available to help you fund your ‘green’ upgrades.

Switching Providers

You could also save on your electricity bills by switching your energy provider. There are currently 13 energy providers in the market, each with different rates on offer. Taking the time to do your research and finding out what options are available for different providers could end up saving you a decent amount of money.

Energy Saving Tips

Using your electricity efficiently is another measure that could save you a few euros on your energy costs. Below are a few pointers on saving energy around your home that could help you cut down your bills.

Set your dishwasher and washing machine to lower temperatures. Using colder water uses less energy and helps you save on your energy costs. The recommended temperature for average use is 30°C.
Only use your washing machine and dishwasher when they are full. This will reduce how frequently these appliances use electricity in your home.
Instead of using your tumble dryer, take advantage of windy or sunny days by hanging your washing to dry.
Turn down the heating in your home. By reducing the heating in your home to about 20°C could reduce your costs by 10pc.
Avoid overheating your water by setting your hot water thermostat to up to 65°C. This ensures that you don’t overheat your water, while also saving on energy costs.
When using your oven, make sure that you keep the door shut. Meal prepping can also come in handy because this will allow you to cook in batches and avoid having to constantly use your oven.
If you’re making one cup of tea, boil enough water for just one. Boiling full kettles of water consumes a lot of energy (and money).
When cooking on your hob, use the right-sized hob for your pot. The closer your hob is in size to the pot you’re using, the less energy you use.
Hold off on switching on your lights while there is still daylight. Open your curtains or blinds and make use of natural light. And when you leave a room, always remember to switch off the light.
When shopping around for light bulbs, always make sure to get the lowest wattage bulb. Replace your old, LED light bulbs with energy efficient alternatives.
Appliances and electronic devices left on standby mode use a lot of energy, so when you’re done using them, switch them off and unplug them to save a few euros.

Staying hopeful (and practical)

The surge in energy prices is not going anywhere any time soon, and while the Government is doing what it can in the background, it’s best for consumers to also be proactive in reducing their costs. Hopefully the next few weeks see the Government bringing forward more long-term strategies to alleviate the growing pressures of electricity price hikes. Until then, we’d suggest that you get energy savvy and start doing your part to save a few euros.