Dr. Muireann Lynch:

We are working on this right now. We are taking a look in particular at electricity costs. Gas costs are far more globally determined because essentially we are a node in the British gas market. The Irish gas market does not really exist. We are part of the British gas market. British gas supply is very well diversified. The prices are set by international movements. What is under our control is how much of our supply is met by gas, and it is a relatively high proportion in Ireland in comparison with other countries.

On the electricity side, it has been well flagged that our electricity costs are very high relative to the rest of Europe. However, when we adjust for purchasing power parity, in other words when we adjust for the cost of living, we come much closer to the average. What we have not yet been able to identify, because we are fairly early on in this work, is what is driving what. Are our energy costs high because our general cost level is high or is our general cost level high because our energy costs are high? It is probably a bit of both. It is worth saying that when we speak about the headline high numbers, they are very much driven by the fact we are a high-cost economy in general across the board.

With regard to the components of the cost we can control, it is quite difficult to compare like with like. Eurostat publishes data which is very helpful on the various components of electricity costs. Looking at this, our wholesale costs seem to be higher relative to the average. We are not doing so badly on the taxes and subsidies. For example, other countries have much higher VAT on electricity than we do. Our network costs are on the higher side also, simply because our network is bigger as our population is more dispersed.

On the wholesale side what we have seen is that while everybody's costs went way up at the height of the energy crisis and then they all came down, our electricity costs have not come down to the same extent as those of other European countries. One thing we have noticed is that other European countries seem to have diversified away from gas generation more than we have here in Ireland. Again, how much of this is in our control? It could just be that we were very much ahead of the curve in term of renewable electricity anyway. Other countries are diversifying away from gas by diversifying to renewables, and we are already so far ahead on the renewables that we cannot push it any further. This remains to be seen. Obviously, we do not have nuclear power. We are phasing out coal, we do not have lignite and there are many technologies which, for one reason or another, we have ruled out. We are super-reliant on gas. As long as that is the case, it is difficult to see how prices the wholesale side will come down.