ESRI warns of higher energy costs ahead
Significantly higher energy prices could be on the way, as the EU attempts to create a single European market for power.
Research by the Economic and Social Research Institute has recommended that Ireland delay entering the Single Electricity Market, which will require expensive integration with the rest of Europe.
Ireland currently runs interconnectors to the North and Britain, but the ESRI says this system would have to be redesigned for the SEM, at a high cost to consumers.
"While the current proposals to change the market to meet EU requirements could result in greater trade, it could come at the cost of significantly higher prices in the domestic market, adding to the burden of consumers," said Professor John FitzGerald.
"Under these circumstances, the correct approach is to delay making a decision and, in conjunction with the EU, to seek to identify a more appropriate model that will be likely to benefit consumers in Ireland and elsewhere in the EU.
"A move towards more energy efficient products and processes should be encouraged, but putting the onus on energy suppliers to deliver on this objective is likely to add to costs for consumers. If subsidies are warranted, the state should provide them directly by targeting any specific failure of the market."
