Anne Rabbitte (Galway East, Fianna Fail) | Oireachtas source

I am taking this Topical Issue matter on behalf of the Minister, Deputy Ryan. I thank the Deputy for raising this important topic. Having read the Topical Issue matter before I came into the Chamber I do not know if it will address all of the questions the Deputy has raised.

I will firstly outline recent price developments and the Government's response and then I will discuss drivers of electricity prices in Ireland more broadly.

The most immediate factor affecting electricity prices in Ireland is the continuing upward trend in international gas prices where we are a price taker. Gas prices have been rising steadily since March 2020 and were further exacerbated following the invasion of Ukraine by Russia. Gas prices are at historic highs and are volatile. This feeds directly through to retail electricity prices as the wholesale price of electricity correlates strongly with the price of gas. This is affecting not just Ireland but all EU member states.

EUROSTAT recently published statistics on household electricity prices in the EU for 2021. These statistics show that electricity prices increased in the second half of 2021 in all but two member states when compared to 2020. The largest increases were seen in Estonia with 50.2 %, followed by Sweden at 49.3 %, and Cyprus with 35.7 %. Energy and supply costs mainly drove the increase. For the same period, records indicate that prices in Ireland rose by around 13%.

I will now turn to the Government's response. The Government is very aware of the impact on households of increasing electricity costs. In addition to measures taken in budget 2022, in February the Government announced a €505 million suite of measures to mitigate the cost-of-living increases. This includes a credit payment to all domestic electricity accounts of €176.22 excluding VAT and a fuel allowance lump sum of €125, among other measures. On 13 April, in the context of the Russian invasion of Ukraine, the Government published the national energy security framework, which details consumer supports and protections that are already in place and that are being enhanced including an additional €100 fuel allowance payment; a new targeted €20 million scheme for the installation of photovoltaic, PV, panels for households; and the reduction in VAT from 13.5% to 9% on gas and electricity bills from May. In addition, response No. 6 of the framework charges the Commission for Regulation of Utilities, CRU, with implementing a package of measures to enhance protections for financially vulnerable customers and customers in debt by quarter 3, ahead of the next heating season. This fuel allowance year recipients received a total of €1,139, compared to €735 in 2021.

I will now turn to the drivers of electricity costs more broadly. As the Deputy will be aware from the EUROSTAT figures, Ireland has higher electricity prices than the EU average. In addition to Ireland's fossil fuel dependency, this is due to a number of factors, including geographical isolation and market scale, population dispersion, and taxes and levies. The best long-term approach for Ireland to reduce consumer exposure to the volatility on international wholesale energy markets is to invest in energy efficiency and renewable energy and via further interconnection with the UK and the EU to deepen the internal energy market.

From the questions raised by Deputy Cowen, I note that unfortunately this does not address the storage facility for wind energy in off-peak times and does not address the competition, which I will take up with the Minister, Deputy Ryan. I also note that the Deputy has raised this more than once, and that now he has statistics from EUROSTAT.

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