The Irish SME Association has warned that planned investment in Ireland’s electricity grid should not result in higher energy bills for businesses or households. The organisation argues that while upgrading the national network is necessary, the financial burden should not be transferred directly to end users.
The warning follows comments from the energy regulator indicating that electricity customers will ultimately fund a substantial grid upgrade programme, estimated to cost close to €19 billion. Under current proposals, domestic users would shoulder approximately 55% of the cost, with businesses covering the remaining 45%.
ISME has pushed back strongly against this approach, stating that small and medium-sized enterprises are already under sustained pressure from high energy prices. While some high-energy sectors benefit from exemptions, such as retail, hospitality, accommodation and nursing homes, many smaller firms remain fully exposed to rising costs.
ISME Chief Executive Neil McDonnell acknowledged the need for significant investment in the electricity network to support population growth and the transition to a greener economy. However, he rejected the assumption that this investment must lead to higher prices. He argued that inefficiencies within the system could absorb much of the cost, rather than placing further strain on businesses and consumers.
A central concern raised by ISME is the lack of effective competition within the Irish energy market. According to the organisation, suppliers are not competing meaningfully on price, which limits downward pressure on costs and leaves customers with little choice.
Ireland consistently records among the highest energy prices in the European Union, according to Eurostat data. Figures from the Sustainable Energy Authority of Ireland also indicate that the largest component of domestic energy prices is the cost of energy itself, rather than network or distribution charges. ISME believes this raises serious questions about transparency and pricing structures within the market.
Mr McDonnell also challenged the common explanation that Ireland’s high prices are primarily due to its geographic location. He pointed out that other peripheral EU states, such as Malta and Cyprus, do not experience comparable price levels, suggesting that additional factors are driving costs here.
Looking ahead, ISME expects wholesale energy prices to fall over time. While network charges may increase as investment ramps up, the association believes this should be offset by lower wholesale costs. In that scenario, ISME argues that overall energy prices should stabilise or decline, rather than rise further.
From a business perspective, the message is clear. Investment in critical infrastructure is essential, but how it is funded will have lasting implications for competitiveness, cost control and long-term economic growth.
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