Eamon Ryan (Dublin Bay South, Green Party) | Oireachtas source

Just to back that up, I had a meeting online with the UK minister in early August and our officials had a meeting with the European Commission yesterday on this reform. The President of the Commission, Dr. von der Leyen, said yesterday that they are now working on an emergency intervention and a structural reform of the electricity market. We need a new market model for electricity that functions and brings us back into balance. The context of that is the absolutely unprecedented increase in gas prices as a result of the war. It is directly a result of the war. It started in the middle of last year when the Russian Government started to reduce the flow of gas into Europe. At the same time, there was also an increase in gas prices because there was huge demand in Asian markets for liquified natural gas, LNG, and that saw vessels going to Asia rather than Europe. European energy markets then started to rise. We started to be aware this time or last year or earlier that this price rise issue was significant and, obviously, a concern. At the end of February of this year, when the war started, obviously that spiked even further and we had immediate crisis in respect of the oil, gas and coal supplies coming from Russia. The price explosion that occurred in March this year then led to somewhat of a reduction. However, what has happened in the past three to four weeks – people can see it as the futures market for gas is readily available on the Internet – the futures curve, the current price but also the futures price into next winter, has gone through a spike and level that is unprecedented. Nothing has ever increased like this. Not even the 1970s oil crisis had this level of price increase in this short of a timeframe. That is why, across Europe, there is now a realisation that it has to change.

This is a big debate that has been ongoing.

As Mr. Gannon said, my Spanish colleague introduced some early measures. There was a debate about the best approach in the European Council over the summer months and previously. This is not an easy thing to do, involving highly complex processes. As we change, we do not want to undermine what Ms MacEvilly mentioned, namely, the gas contracts for new generation that we delivered through an auction process early this year. We want to see that delivered. How do we deliver those while at the same time being part of this wider European forum, which to my mind is needed? An emergency meeting of the European Energy Council has been called for next week.

The Commission has not provided details on what it believes the approach should be. There are various proposals. The Greek Government has also proposed in effect a separation between a renewable electricity market and a fossil fuel electricity market; I am simplifying it. Yesterday the Commission identified that the core problem is that the gas price is setting the price on the electricity market. How do we avoid that tenfold or 14-fold increase in gas prices leading to a similar such increase in electricity prices? Next week's meeting will consider that.

These are two separate issues. The capacity issue is a real issue and we need to work on that. As Mr. Foley and the commissioners have said, we need to focus and deliver on that. Due to the external shock with gas being used as a weapon of war in this war, this price impact is ten times more significant in its potential impact on Irish householders. We need to address that in a variety of ways. Measures have been mentioned here today, including a fuel poverty strategy, obviously the budget and a range of other measures that we will need to look at. They are separate issues and it is critical that we address both, but the latter one is unprecedented and deserves our most urgent attention because it threatens Irish businesses and householders. It is not just here but every country in Europe is experiencing it.

Looking at the wholesale prices today, ours are at unprecedented levels, but they are quite significantly below the continental price partly because we are part of a separate system, the UK gas connection system. As Mr. Gannon said, that requires us to work with the UK Government as well as the European Commission and our European colleagues. It is all interconnected. The UK's gas connection with the Netherlands and Belgium is in full flow from the UK into the Continent at present. Similarly, because our French colleagues are experiencing considerable difficulty with their electricity system, the interconnectors are flowing into France at the moment from across Europe, including the UK. That has knock-on consequences for how our interconnectors work, as Mr. Gannon has said. This European system is interconnected to the network system. It is a single market effectively for gas and that is driving a single phenomenon in the market for electricity which is why this solution needs to come at a European as well as a national level.