Ireland needs 92 GW of LDES to integrate renewable generation, reduce household energy costs

To avoid shifting cost burdens associated with the energy transition onto residential billpayers, Irish energy policymakers need to focus as much on affordability and system integration as they do on renewable deployment, warned Aurora Energy Research.

The energy research agency compared two possible 2035 outcomes for Ireland’s energy system – one model focusing on decarbonization and renewable deployment and another model incorporating consumer electrification, networks and flexibility.

Under the flexibility model, household energy costs could be around 20% lower in 2035. Aurora’s findings also highlighted that around 38% of a typical household electricity bill in Ireland relates directly to electricity generation, with network, balancing and other system costs accounting for the majority.

The findings call for a more careful approach to reducing emissions and meeting European Union decarbonization targets. Aurora Energy Research lead Steph Unsworth said Irish householders can reap the rewards of low cost, clean energy provided more effort is put into system planning.

“The energy transition is often framed as a choice between decarbonization and affordability, but that is the wrong question. A successful transition must deliver both,” she said. “If Ireland gets the balance right between renewables, infrastructure and electrification, consumers can benefit from both lower emissions and lower energy costs.”

Currently, Irish householders pay some of the highest electricity rates in the European Union. Eurostat data shows the country had the second-highest household electricity prices in the EU in 2025, with average household electricity prices reaching €0.36 ($0.42)/kWh.

Unsworth presented Aurora’s analysis in a recent webinar titled ‘A Cheaper Shade of Green’ focusing on the Irish market. She said Ireland needs to add more long duration energy storage (LDES) to its grid to integrate and store the renewable generation being added via wind and solar. Unless the ongoing LDES market reforms come to fruition Irish billpayers will continue having to pay for wasted electricity generation.

Irish battery energy storage has been slow to take off but it does have several short duration systems on the grid. However, Unsworth recommended LDES, adding that Ireland will need approximately 92 GW of LDES capacity. As of July, Ireland’s energy storage project pipeline was a mere 2.3 GW and its total grid-connected energy storage capacity is around 800 MW.

Unsworth said adding such high volumes of LDES would be difficult to achieve as it would require government offtake-backed floors because no merchant-driven floor would interact in such a saturated market as it would not be profitable.

In addition to more LDES capacity, Ireland needs to provide more incentives for residential ratepayers to shift their energy consumption to off-peak periods to take demand-side pressure off the grid. Its national energy policy should focus on low-cost electrification alongside investment in network reliability.

According to Unsworth, Ireland’s network costs are currently the second largest component of a consumer bill because a lot of network expansion is needed and this work is being covered in consumer bills. Last year, Ireland invested €18.9 billion in its biggest ever grid expansion plan – to be paid back over the next several decades by household levies, claimed Unsworth.

Unsworth warned that, starting in October, Irish homes should expect a substantial bill increase for the next tariff period of up to €21. By 2035, residential energy bills may start to dip again as grid upgrades slowly start to deliver, she said. In the meantime, Ireland is paying for the solution and the problem at the same time, said Unsworth.

The Aurora research analyst added that modifying consumer behavior won’t be enough to reduce system expense. Shifting bill components to standing charges instead of variable rates could incentivize people to electrify their homes or change demand patterns and maybe reduce their bills marginally by around 2%, she said. Overall, more electrification is needed to spread costs, and smarter, storage focused policies to help the grid get the most use out of the renewable capacity being added will improve the situation and bring wholesale electricity prices down.