The Government is to reconsider putting a price cap on energy bills in the new year.

This comes despite the Government having previously warned that introducing a cap would pose a risk to the economy.

The Department of Environment, Climate Action and Communications is considering a price guarantee for a portion of energy used in households, the Sunday Business Post reported.

It has tasked the Economic and Social Research Institute (ESRI) with modelling possible price guarantees which would see households and some businesses allowed a portion of their average monthly energy consumption at a guaranteed price per unit of energy.

Anything exceeding the allowed level would be charged at the market price. The Government would make up the difference between the guaranteed portion of energy use and the wholesale energy price paid by energy companies.

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It comes months after Minister for the Environment Eamon Ryan ruled out introducing price caps on energy charges.

"It would benefit the better-off, who tend to use more energy, who tend to have the biggest bills," he told the Dáil. "Secondly, it would benefit the energy industry."