Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

Wholesale and retail energy costs, electricity and natural gas, have risen significantly over the past year, primarily driven by the market price for natural gas internationally. The global natural gas price appears to be rising because of a combination of international geopolitical factors, lower than usual reserves and regional supply chain and weather issues. Increased oil prices are also affecting the cost of petrol and diesel at the pump.

I am extremely conscious of the pressure that volatility in costs can put on a business, particularly small enterprises, those with tight margins and those particularly dependent on certain fuels. I have asked my officials to engage with the Department of the Environment, Climate and Communications on the issues arising for business as part of wider Government consideration of the effects of energy costs increasing. Energy bills can be an inflexible component of the cost base of a business in the short term and in certain energy intensive manufacturing sectors. These are a key element of cost-competitiveness.

Energy costs are volatile historically. Ireland is particularly dependent on natural gas for electricity generation, heating and industry and, therefore, recent international price spikes are a cause for concern for the Government and a threat to our competitiveness. However, these increases are unlikely to last indefinitely as the market responds and production increases. Recent global price volatility for fuels is yet another reminder that our society and our businesses should increasingly be looking to reduce our exposure to fossil fuels.

Government efforts to achieve price competitiveness should focus on delivering diversified energy systems and support for energy efficiency and renewables, with regulation that protects consumers and delivers efficient, competitive energy retail and wholesale markets. A range of incentives and advice is available to business to help them use energy efficiently, diversify their fuel use and switch to renewable energy sources. Small businesses can currently receive an energy audit voucher from SEAI to get professional advice on how to increase efficiency and reduce their costs.

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