A prolonged conflict in the Middle East could impact retail prices in Ireland, but ESB said it had yet to see wholesale energy costs spike as they did when Russia began its invasion of Ukraine in 2022.
“There has been a huge volatility in markets since February 28th when the Iran war kicked off, and it has seen a significant increase in the cost of wholesale gas on international markets,” ESB’s chief financial officer Paul Stapleton said. “But in terms of ESB’s business, we are resilient to manage that type of volatility. We’re not yet seeing the prices escalate to the level we saw post the Ukraine invasion, where price reached extraordinary levels. The current volatility and escalation of prices is not yet on that scale.”
Stapleton made the comments as the utility group announced its annual report. Profit at ESB fell €70 million last year as it counted the cost of Storm Éowyn last January.
The storm saw ESB Networks and NIE Networks incur an additional €95 million of operating costs to reconnect customers and repair damaged infrastructure.
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Stapleton said the group had initiated a winter resilience programme that included timber cutting to keep trees clear of electricity lines, increasing stock levels and enhancing forestry corridors.
“We need to enhance the resilience of the network and to be able to cope better with more severe weather events,” he said. “We are upgrading networks in the worst-affected areas to make sure they are as resilient as they can be.”
Profit after tax was €636 million, down from €706 million a year earlier. That was mainly due to the costs of the storm, which kept ESB Networks’ operating profit broadly in line with 2024 despite higher regulated revenues, and contributed to a decline of €89 million in NIE Networks’ operating profit for the year. NIE Networks was also hit by the once-off recovery in 2024 of allowed regulated costs arising from the surge in inflation of 2022 and 2023.
The group is proposing a dividend of €149 million, down from €189 million previously.
Stapleton said the results reflected ESB’s continued commitment to substantial investment in infrastructure, and allowed the group to retain the financial strength to invest at greater scale in the years ahead.
“That investment is supporting housing, it’s supporting economic growth and jobs. It’s supporting climate action and enhancing the resilience of the system,” Stapleton said. “Ultimately, it is helping us on the pathway to energy independence and a system based on renewables, where we won’t be subject to the kind of geopolitical price shocks that we are seeing at the current minute. The profitability that we achieved enabled us to deliver that investment.”
ESB said it invested a record €2.7 billion in energy infrastructure last year, including its joint ventures, which amounted to €4 for every €1 of profit after tax earned. That included €1.7 billion in electricity networks in Ireland and Northern Ireland and more than €600 million in wind and solar generation project.
Work to decarbonise ESB’s power generation is ongoing, with the utility saying the carbon intensity of its network was down 53 per cent compared to the baseline set in 2005.
The year saw the ending of generation using coal at Moneypoint power station, with the Co Clare site transitioning to a renewable energy hub in the long term. The group also secured the rights to develop the 900MW Tonn Nua offshore wind project off the coast of Waterford with Ørsted, and has a solar portfolio of 700MW currently in development.
ESB said it expects to invest €20 billion over the next five years, with up to €16 billion directed to electricity networks throughout Ireland.
