Number of Irish households in energy poverty hits record 29%

The number of Irish households estimated to be in energy poverty has passed 29%, according to research by the Economic and Social Research Institute (ESRI).

Based on one measure – the number of people who spend more than a tenth of their net income on energy bills, excluding motor fuel – recent energy inflation has increased the share of households in energy poverty to 29.4%.

This is up from 13.2% in 2015/16, the latest year of data available, and above the previous record of 23% in 1994/95.

This is a rough estimate of calculating fuel poverty, as it does not capture people who cannot afford to spend 10% of their income on heating, and it may include households who may turn their heating up much higher than the average household.

The ESRI research on energy poverty and deprivation was funded by the Community Foundation for Ireland.

It found that energy inflation between January 2021 and April 2022 increased the cost of estimated household consumption by 21.27 euro per week on average. This rises to 38.63 euro per week when motor fuels are included.

If energy prices rise by a further 25%, the ESRI estimates energy costs would increase by an average of 36.57 euro, excluding motor fuels, or 67.66 euro if they are included.

The research concluded that up to 43% of households could be at risk of energy poverty if energy bills increase by a further 25%.

Niall Farrell, one of the authors of the report, said: “Our research finds that, on average, these changes are more burdensome for lower-income households, rural households and those at risk of poverty.

“This is because energy expenditures tend to comprise a larger share of income for these households.”

Barra Roantree, another report author, said: “Our findings have important implications for policy.

“If the objective is to protect those most affected by rising energy prices, cutting indirect taxes is a poorly targeted response. This is as most of the revenue is spent compensating higher-income households who have been less affected.”

It said increasing 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.

In February, the Government announced a 200 euro electricity grant, a 20% reduction in public transport fares, and a 125 euro lump sum for Fuel Allowance recipients as part of a cost-of-living package.

Ministers have repeatedly said in recent weeks that the Government will not be taking any more direct measures to help those affected by the cost of living before the Budget is announced in October, and will instead work to reduce the cost of childcare and third-level education.

Speaking at a media event on Wednesday to promote cost-of-living protests planned across the country, Sinn Fein leader Mary Lou McDonald said: “If they wait until October, arguably a lot of the measures, whatever they might be, won’t take effect until the new year.

“That’s unthinkable – it’s unthinkable to ask families, to ask workers, to ask whole communities to simply muddle by under the kind of pressures that they’re under between now and the autumn time and into the winter.”

Tanaiste Leo Varadkar described the report as “very stark” but said it is not surprising.

“I don’t think there’s all that much new information there,” he said.

“Everyone knows the extent to which the price of petrol and diesel has gone up and home heating oil.

“Anyone who looks at their utility bill can see how much the price of electricity and gas has gone up.

“So the Government is very much aware that people are feeling the pinch and that some families in particular are really struggling.

“That’s why we have intervened. A billion euros in the budget only in January to increase pensions welfare, reduce income taxes for working people, and since then another 1.4 billion in measures that were universal and targeted, increase in fuel allowance for people on the lowest incomes, and then reductions in excise on diesel and petrol and the 200 euros off electricity bills which benefits everyone.

“As things stands, we will do more. But that will come on Budget Day in about three-and-a-half months’ time.

“I’m not ruling out doing things in the interim, but certainly at this stage we’re working towards another package of measures to help people with the cost of living, and that will be on Budget Day.”