Dáil Éireann Debate, Wednesday - 17 December 2025
68. Deputy Pa Daly asked the Minister for Climate, Energy and the Environment to report on his engagements with the CRU since he took office; if he has discussed the powers they have to monitor and regulate hedging; and if he will make a statement on the matter. [72908/25]
View answerThe electricity and gas retail markets in Ireland operate within an EU regulatory regime wherein these markets are commercial and liberalised. The Commission for Regulation of Utilities (CRU) ended its regulation of retail prices in the electricity market in 2011, and in the gas market in 2014. Price setting by electricity suppliers is, therefore, a commercial matter for the companies concerned.
Retail prices are influenced by several factors, including wholesale energy prices, system operating costs and supplier hedging. The latest data from Eurostat shows that, in nominal terms, Ireland ranked fifth for electricity prices and eighth for household gas prices among European countries in the first half of 2025. When adjusting for purchasing power parity, Ireland is mid-table in terms of energy affordability with the twelfth highest electricity and gas prices among European countries.
Regarding hedging, suppliers in Ireland were shown to have taken a prudent approach to hedging which had the benefit of protecting final customers from the worst effects of the wholesale price crisis. Conversely, hedging limits the ability of suppliers to reduce prices immediately in line with wholesale price shifts.
The International Energy Agency (IEA) has observed that Irish retail prices have not adjusted at a comparable pace to the decline in wholesale prices, with the energy component of retail prices remaining up to three times that of wholesale prices.
While the CRU has found no evidence of market failure or windfall profits in the retail sector in its market monitoring role, the IEA findings underline the importance of progressing the Programme for Government commitment to “commission an independent review into the speed and level of passthrough from wholesale prices to retail prices”.
I have written to the CRU to request that they commence this independent review, building on the work of previous CRU investigations by reviewing the competitiveness of Irish retail energy markets, examining supplier costs, including hedging and pricing practices, and providing comparative price analysis with other EU Member States.
It will also assess whether measures are warranted to enhance market responsiveness to wholesale price changes, and make recommendations to ensure that the benefits of lower wholesale prices are felt by consumers. This report will inform the work of the National Energy Affordability Taskforce.
In addition, the Department is transposing the new Electricity Market Design Directive 2024. This Directive requires regulators to ensure that suppliers implement appropriate hedging strategies to reduce the risk of supply failure.
