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

I thank the Deputies for raising this critical issue and allowing us to have this debate this evening. Clearly, the situation we are witnessing with increases in energy bills and the cost of living is the matter of utmost concern and is central to everything at this time in the country. We are keenly aware of the growing pressure on families and businesses. We have been thinking about and working on this for the past year and a half because this started some year and a half ago for a variety of different reasons. It began with the Russians starting to turn off the gas over a year ago in anticipation of the war. We have been working and talking at length with our European colleagues and other colleagues to get the right policy response. It is affecting every European country. It is the impact of international gas prices going up, on which we are agreed. I heard that for the first time today. For the last year there has been all this debate, confusion in my mind, as to what is the cause of the problem. The cause of the problem is the war in Ukraine; that is putting up the price of gas and that is putting up the price of electricity. Many people have avoided saying that or disagreed with that or doubted it but after this summer, it is as clear as day. Thank God, at last, we know what the problem is. Energy, and with it the inflation that comes from its price increases, is being used as a weapon of war by the Russian Government. It wants the cost of living to divide us, to undermine western democracies and our support for the citizens of Ukraine as part of the war effort. We cannot divide. We have to stand strong and protect our households and businesses as we do so.

As the said Taoiseach today, there is no question. Do we have to intervene? Of course we do. The question is to get the intervention right. We started a year ago. We have been intervening. I want to review some of the measures in my contribution. We will go further in the budget in two weeks. However, I agree with the Taoiseach that we must be careful to respond in the right way. I am afraid that Deputy Doherty does not have the right plan. I do not think the measures he proposes are the optimal but that they may be contradictory and counterproductive. I understand he will come out on Friday and explain the details and not on Friday week, as Deputy Ó Broin said. That will be very useful because it bears really detailed analysis. These are complex markets and interventions. I know very well the French, Spanish and Romanian measures and those of others. We have looked at them in detail with our colleagues and came to our best conclusions. They are not finalised yet because we are still working with the European Commission. However, it seems the combination of measures that Deputy Doherty is proposing will not work well. I wait to hear the finer details because it needs details. We need to do highly complex market interventions. The Deputy needs to that on Friday and not Friday week and I look forward to hearing it.

We do need to introduce a windfall tax on both the electricity market and on fossil fuel companies. That is what we are working with the European Union to do. It is better to do it in a co-ordinated EU way because what Putin wants to do is to divide us and create division and doubt in Europe. So we are working on that.

The Commission presented the proposals today. They are so complex that it is necessary to look at each country to see how they might apply. There is flexibility and, in my contribution, I will outline why I think there needs to be flexibility in how we adapt to them. We were very much central to designing, promoting and supporting them in that European Council and also at a further meeting of energy ministers which took place on Sunday and Monday where we again took the opportunity to discuss in detail the right thing to do.

There has been a suggestion that nothing has been done; that is not a true. The €2.4 billion worth of measures that we implemented are important and I think we can learn a lot. We need to understand what they were and what they could be in the upcoming budget. I will set out some of the global market developments behind this. I want to set out the role of the Commission for the Regulation of Utilities, CRU. The key thing we need to focus on is protecting our householders. I want to outline what we have done in some of those energy-efficiency and welfare supports. First, it is important to describe what has been happening with prices in the market and to clarify that those energy price increases were not created by the Government or by regulatory decisions. Price regulation in the energy market ended many years ago. Suppliers compete with each other and set their own prices as one would expect in a competitive commercial and liberalised market.

Increases in wholesale energy prices followed a rise in international gas prices, which has been the principal driver of the increases. Some 50% of our electricity comes from gas and it is setting the market price. Those prices started to rise back in 2020 for a variety of reasons, including increasing demand in Asian markets and power generation in Europe switching to gas for different reasons. As I said, early in this process the Russian Government started to switch off gas in the expectation of reducing the stores of gas Europe has in advance of a war. I believe that was done strategically in advance of knowing a war was going to take place to try to weaken the European position. That is why there has been so much focus on gas storage over the summer. We came into this spring and summer with very low European gas stocks because of those actions by the Russian Government.

There was an increase in gas prices earlier in the year but what happened in the last week of July and the first three weeks of August was beyond compare because the markets saw for real that Gazprom was about to switch off the pipe, in particular Nord Stream 1 which supplies so much of Europe. That is why over this summer the scale of the price increase accelerated even further again. That is why we need to respond.

It is a Europe-wide phenomenon. Some countries are more exposed than we are because they are directly connected and have a much higher percentage of Russian gas in their systems. That is why the European Energy Council met in Brussels last Friday. It was an extraordinary emergency meeting to assess what could be done and consider different measures to try to protect consumers across the Continent.

In that meeting, the Commission set out a five-point plan for immediate emergency measures. There was a range of other medium- and long-term measures. However, because of the price increases over the summer we realised that together all of us in Europe needed to act fast now to protect our people.

Serious measures include the capping of revenues. The European proposals include caps, but it is the cap on the revenues of those energy companies making supernormal profits. That is the right cap in my mind. I look forward to hearing Sinn Féin's proposals on an alternative cap that does not give them a blank cheque. In a sense rather than capping the revenues, Sinn Féin would allow it to continue. I would like to see Sinn Féin's further analysis giving the detail on getting that combination together.

The second measure is the introduction of a solidarity levy on the fossil fuel extraction industry. Our primary example of that is Corrib and we need to be appropriate and clever in getting it right in line with European law and so on to ensure we can also participate in that. That is what we have discussed in the Council and since.

The third measure is critical. I have been trying to highlight its real benefit. It is incentivising demand-reduction, particularly at peak times. President Von der Leyen set out the Commission's paper this afternoon. The reason we focus on that peak hour, particularly with larger energy users, is that if demand can be reduced at that time, it brings down the price for everyone. That is a really practical way to help householders and businesses. That last plant at the peak time is the most expensive.

We need to provide liquidity and support mechanisms for energy businesses which are in difficulty and may not be able to pay the advance collateral for householders' bills over the following two months.

I support the proposals for a wider cap on international gas market prices which are completely out of kilter with where they should be. To get that right we need to work with countries such as Japan, South Korea and Norway to ensure it can be effective and work. Europe needs to use its purchasing power to try to protect our householders. That is complex and not easy. The Commissioner asked what the mandate was. In my contribution I said, "Go for that as best you can but it will only work if there is real international co-operation in what we do."

I am sorry I do not have time to set out all the measures. I set them out in my contribution to the Seanad earlier, including everything we are doing with CRU to protect vulnerable householders, all the critical social welfare payments along with the energy credit. I disagree with Sinn Féin; I think we need a credit. This is so significant that it is appropriate to get a payment out to every household. While I accept targeting social welfare at those with the lowest pay and the most vulnerable, I am not sure that cutting out a whole swathe of Irish society from getting that credit is the right response. We need to stay united and protect all our people, but these are unprecedented times.

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