Every home in the country will receive €100 off their electricity bill in early 2022, a measure which was approved by Cabinet today (Tuesday).

The payment is one of a suite of measures to mitigate the effects of the unprecedented rise in electricity prices.

A €210m scheme was approved with approximately 2.1 million domestic electricity account holders set to benefit in the one-off, exceptional payment to their electricity accounts.

However, primary and secondary legislation will be required to underpin the scheme.

The new scheme to be known as the Electricity Costs Emergency Benefit Scheme following the passage of primary legislation through the Oireachtas in the New Year.

The scheme will be operated by ESB Networks who will make payments to the individual energy suppliers and the Commission for the Regulation of Utilities (CRU) will be charged with oversight of the scheme.

All domestic accounts, including Pay as You Go customers, will receive the credit. How the payment will be applied is currently being finalised and will be announced in the New Year. However, it will be automatic and will apply to all customers and people will not need to apply for it.

“The Government is very conscious that international energy prices are having a significant effect on utility bills," Minister for the Environment, Climate and Communications, Eamon Ryan TD, said.

"While we took measures in the Budget to support vulnerable groups, this credit is designed to provide all householders with a contribution to their electricity bills in the spring of 2022. In the long term, the way to reduce our dependence on internationally traded fossil fuels is to expand our own indigenous supply of renewable power. We are working towards having up to 80% of our electricity from renewables by 2030.”

The most immediate factor affecting electricity prices in Ireland is the upward trend in international gas prices. In Europe, wholesale natural gas prices have been on an upward curve since the second half of 2020. This feeds directly through to retail electricity prices, as the wholesale price of electricity correlates strongly with the price of gas.