Dáil debates

Thursday, 24 March 2022

Ceisteanna ó Cheannairí - Leaders' Questions

 

12:10 pm

Photo of Denis NaughtenDenis Naughten (Roscommon-Galway, Independent) | Oireachtas source

Inflation makes everyone poorer, particularly those on fixed incomes. In Ireland, energy costs have a far greater impact on inflation than in anywhere else in the EU. I want to put three practical suggestions to the Minister. Our electricity prices are among the most expensive in Europe, with Irish families paying, on average, €180 extra for electricity annually. This is partly as a result of Irish families being forced to subsidise the cost of green electricity, grid connections and backup supplies for existing and already-planned speculative data centres with no substantial employment dividend here in Ireland. The Government decided in 2018 to stop the practice whereby those struggling to pay electricity bills were subsidising the speculative developers and instead make data centres pay their own electricity costs. Therefore, the Government must reduce the cost by stopping the data centre subsidy.

Tomorrow the European Council will discuss the possibility of block-purchasing natural gas, which has the potential to reduce our electricity costs. However, we have no way of storing the gas, even though we have two potential facilities off the Cork coast — the decommissioned Kinsale and Seven Heads gas fields. When I was Minister, I asked my Department to assess the potential of these wells for carbon capture and storage and their potential for the storage of natural gas. In December 2020, in advance of the Dáil deciding on the decommissioning of the Kinsale wells, I sought a copy of this assessment. Sadly, this vital information was not made available to the Dáil, but we were promised that the assessment would be completed by the end of last year. I have now been informed that it will be early 2023 before this assessment will be published, nearly six years after the process commenced. This is far too late for Ireland to capitalise on any natural gas price discount from the European Union.

Carbon tax is supposed to be an environmental tax to drive behavioural change but the current carbon tax model is flawed in this regard because the goal is about bringing in more taxes rather than driving change. If we are serious about moving away from our dependence on fossil fuels, we need a model of carbon taxation that is actually fluid. We must do so by taking into account the ever-changing cost of a barrel of oil. If carbon taxes increase significantly and the price of oil collapses, they will not bring about the type of step change we actually require. When the price of oil increases sharply, it has a direct impact on the cost of living for families as well as a devastating impact on our small, open economy. We are seeing this impact today. It will get even worse when carbon taxes are increased in five weeks' time because Ireland is more exposed to price volatility than most other EU countries.

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