From the very beginning energy has been central to human existence. Economists will tell you that mastery of a new technology has always conferred a competitive advantage. In distant human history, when we were hunter gatherers, the key technology was fire. Humans are the only animal to have mastered fire and this conferred an evolutionary advantage. With fire, the energy provider, humans gradually conquered the planet. Anthropologists and ancient historians refer to the first 400,000 years of the history of our species as the era of fire.
The anthropologist James Scott describes us as a “pyrophyte” species, an animal shaped by fire. Fire gave us heat, allowing us to roam into inhospitable territory. Fire also allowed us to cook, and heating food released energy, allowing us to eat a far more varied diet. Hard nuts were softened by fire, letting our jaws shrink, as we didn’t need such powerful jaw muscles – fire did the softening-up for us. Our stomachs became smaller, our brains bigger.
Fire also changed us socially. Around the hearth we developed language. Chatting away allowed our imaginations to speculate of the origin of the world, creating myths and ultimately religious beliefs. More than anything, fire helped make us social, as our nomadic ancestors moved from place to place, each place anchored by the communal fire.
Ireland needs to become more like Denmark, another small country with no local fossil fuels and a cold, wet climate where families require affordable energy
Because fire is an energy in itself, and because heat by changing molecular structure releases energy, this amazing technology and humans have been intertwined for millenniums. In very recent centuries, the industrial revolution was, in a way, little more than the result of humans finding lots of new things to burn, generating the heat required to alter the molecular structure of all sorts of other things, paving the way for modern chemistry.
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The price of energy is important, not just for the economy but for society. Politically, the price of energy is something that both the left and right can agree on. If you are on the left, expensive energy carries a significant social cost. Just think of drying clothes. Your grandmother welcomed a dry, windy day: “Great drying in that weather” is a statement of social fact. Today, in our damp climate, the cost of energy is so high that a poor family can’t afford to use a tumble dryer. When clothes remain damp and children get sick, the social cost of energy becomes obvious. For the left, lower energy prices are a social imperative.
For the commercial right, energy powers business and is a significant running cost. A country with higher energy costs will become uncompetitive. High energy prices are a tax on business. If that country is also in the inward investment business, comparative energy prices will have a profound impact on the attractiveness of that country relative to others.
This brings us to the price of energy in Ireland.
In late 2023, electricity prices in Ireland were among the most expensive in the EU, averaging about €0.44 per kWh. That is almost double the EU average of €0.22 per kWh. On that basis, the average electricity bill for Irish households with a standard 24-hour urban meter comes out at about €1,374 per year. According to Selectra (a market comparison service), electricity prices in Ireland have almost tripled over the past 12 years, a result of choices we have made. For example, Scandinavian countries with similar income to us pay about half for their energy.
Why is this? It is largely because we have taken the “Sure it’ll be grand” approach to energy, taking the easy position of importing other people’s gas rather than investing in our own renewables. In contrast, a country such as Denmark enjoys electricity prices far below ours because it has invested significantly in renewables. In contrast more than a third (34.2 per cent) of Ireland’s electricity was generated from natural gas, with the volatility in prices having a material knock-on effect for Ireland’s energy bills.
Gas prices have been high since the war in Ukraine, with Irish households paying about €0.14 per kWh, translating to an annual gas bill of €1,258. That is about 1½ times the EU average (€0.09 per kWh), with Ireland ranking as one of the most expensive countries in the bloc again having seen prices rise 70 per cent since 2020. It’s also worth noting that the State itself plays a direct role in these high energy prices. Taxes and levies contribute about an extra 20-25 per cent to the average household energy bill.
Despite having ample wind and wave potential, our casual approach means we rely on imported energy. In 2023 about 80 per cent of Ireland’s energy needs came from imports By comparison, Germany, another country suffering from elevated electricity prices, imported about 63 per cent of its energy needs, primarily relying on natural gas from Russia before diversifying after the Ukraine war. France, on the other hand, is much less dependent on imports due to its significant nuclear power capacity. Only 45 per cent of France’s energy consumption comes from imports. Nuclear power supplies about 70 per cent of its electricity. This domestic energy production has largely shielded France from exposure to volatile global energy prices in recent years compared with its neighbours.
Denmark, the leader in renewable energy, imported only about 45 per cent of its energy from outside sources in 2022 – about half of Ireland’s rate. Wind energy alone supplied more than 50 per cent of Denmark’s electricity, significantly reducing its dependence on imported fossil fuels.
Understanding the difficulties that many families are experiencing, Budget 2025 contain a flurry of subsidies, grants and help for “ordinary” people. A one-off €170 million energy subsidy scheme aims to provide about €4,000 in support to some 39,000 hospitality and retail businesses. Households can also expect a total of €250 worth of electricity credits, paid in two instalments this year and next. Those entitled to benefits will also see a €300 lump-sum fuel allowance this November.
All of which is essential, but it’s hard to escape the sense that the Government is dealing with the symptoms rather than the causes. Imagine if we didn’t have the multinational corporate tax money to throw around, masking our fundamental energy deficiency with handouts?
[ Ireland’s fossil fuel usage peaked in 2008, but do we have the will to end it?Opens in new window ]
Ireland needs to become more like Denmark, another small country with no local fossil fuels and a cold, wet climate where families require affordable energy. This means moving as quickly as possible to local renewable energy sources: wind, wave and, yes, sun. Quite apart from the implications of renewables for climate change, there is the real issue of national security in a conflicted world, as well as giving poorer families a break and, of course, the over-riding economic imperative of cost competitiveness.
A significant part of the story of humanity is the story of energy. Outsourcing our energy needs to others is not a sustainable option, particularly when there are local options that could significantly reduce the cost of electricity. Other countries have done it. Why not Ireland?