Investment in the electricity grid must increase by almost three-fold to €20bn over the next five years, the new Public Expenditure Minister has been warned.

But customers may have to pay for this investment through higher bills in the short term.

Department officials told Jack Chambers that the Government must “significantly increase” the funds being pumped into energy infrastructure.

“This is required to cater for increased housing, demand from large energy users (primarily data centres) and to facilitate growth in renewable electricity, including offshore wind,” they wrote.

However, they also warned this level of investment will “place upward pressure on electricity prices that are already the highest in the EU”.

They said: “Defraying some of the impact on... electricity prices would have a significantly larger investment requirement.”

Mr Chambers said yesterday that the country “needs to address some of the deficits we have with the energy grid”.

The minister commented: “Without further investment in our energy system and in our grid, the costs around that would be borne by businesses and consumers.”