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24 Sept 2022

Up to 70% of Irish homes could end up in energy poverty

Up to 70% of Irish homes could end up in energy poverty

Almost 70 per cent of households could be facing energy poverty in worst-case scenarios drawn up by a State energy crisis  group.

If energy prices continue to rise then 69.2 per cent of households would be spending more than 10 per cent of their income on energy. 

In June, the ESRI said based on one measure, recent energy inflation has increased the estimated share of households in energy poverty to 29 per cent.

This leaves the share of households in energy poverty – defined as spending more than a tenth of their net income on energy (including electricity but excluding motor fuel) – above its previously recorded high of 23 per cent in 1994/95.

The estimate is based on energy inflation observed from January 2021 to April 2022, with a further 25 per cent rise in energy prices increasing this share to 43 per cent.

A presentation delivered in June to the Energy Supply Emergency Group (ESEG) illustrated this cost increase trend and projected the figures.

The estimates were drawn up by the ESRI - details of which were released to the Irish Times.

Some of its calculations were released in mid-June in a paper which showed that energy poverty had risen to a record high of 29.4 per cent. It was estimated that it could rise as high as 43 per cent if prices rose again by 25 per cent.

The ESRI also drew up private analysis showing the impact of even higher increases.

These were drafted up for the ESEG – the group responsible for co-ordinating Ireland’s response to the energy security crisis, which was formed earlier this year. The presentation was released to The Irish Times under Freedom of Information laws.

The findings show that 50 per cent price increase would lead to 54.4 per cent of households being in energy poverty while a 100 per cent increase would bring this figure up to 69.2 per cent. The reference period for price increases is January 2021 to April 2022.

The Central Statistics Office (CSO) estimates the cost of energy products and utilities increased by 48 per cent in the year to July.

Energy prices have increased significantly in the past year or so, with all energy suppliers announcing a raft of price increases, in part explained by the Russian invasion of Ukraine. 

The ESRI says increases to welfare payments, the fuel allowance, and even lump-sum payments like the household electricity credit are better targeted at those most affected by energy inflation as measures to help those most affected. 

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