Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

The war in Ukraine and Russia’s reduction of gas supplies to Europe have led to volatility in energy markets and an increase in wholesale gas prices. This is added to existing supply constraints in electricity markets across Europe, which in turn have led to an unprecedented increase in retail electricity and gas prices for consumers, households and businesses in Ireland and across Europe. I am very cognisant of the difficulties this is causing for so many. It is clear the increase in energy prices is leading to windfall gains for some energy companies across Europe, particularly those involved in the production of fossil fuels and those producing energy using technologies that are not dependent on gas. My officials have been working with the Department of the Environment, Climate and Communications to attempt to quantify such gains and to explore the potential of collecting a portion of these gains to provide support to energy consumers during these very difficult times.

Work in this regard is now focusing on a proposed European Commission regulation, which is under rapid negotiation. Gains to electricity producers are driven by the market structure, which determines the marginal price paid for each unit of electricity sold. For this reason, the EU regulation proposes to include an inframarginal price cap in the electricity market, designed to limit windfall revenues for producers that are not experiencing input cost inflation. The proposal will be negotiated throughout the remainder of this month with a view to being approved at a meeting of the Council of energy ministers on 30 September. I fully support the objectives of this proposal.

The Deputy referenced discussions at the Eurogroup. The Eurogroup discussed this matter at its most recent meeting. In the statement I issued after that, I recognised that super levels of profitability should not be experienced by some while so many are suffering the economic consequences of a war.

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