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

The idea that, but for the political will, we would suddenly have a market system that both delivered cheaper renewable power that we have access to and gave us security is not the real world. We will work and engage with Europe on that reform - we are in the middle of it, with a European Council meeting last week - and I look forward to hearing Sinn Féin's suggestions on what the new market structures would be. Let us have a debate on what exactly Sinn Féin wants the market system to be. That is the complex issue that we have to consider and deliver on in the next year. According to the analysis, it will take approximately a year. I referred to a trilemma energy policy earlier - low prices for our people, secure power and decarbonised power.

First, I will set out what has been happening to prices in the market. The most immediate factor affecting energy prices in Ireland is sustained high international gas prices which have risen and remained high since the second half of 2020. It started eight or nine months before the war started. Russia started to turn off the tap. This has been going on for some time. Data supplied by the Commission for Regulation of Utilities, CRU, indicates that the electricity and gas bills for an average household have increased to a combined total of more than €4,000. We all recognise this has had a huge impact on our people.

In the aftermath of the invasion of Ukraine, at its peak during August last year, wholesale UK natural gas spot prices were trading at 600 pence a therm which is 13 times higher than its historic level of 15 pence a therm. Due to high gas storage levels, warmer than average winter conditions and policy efforts to reduce natural gas demand across Europe, wholesale gas prices have fallen and are currently well below the peak values of last year. Putin is losing. He is not winning the war. Europe is stopping the importation of Russian oil and gas. There has been a 40% reduction in Russia's oil and gas revenue. There has been a 40% increase in Europe - Ireland had a record year too - in the deployment of renewable power and heat pumps. We cannot let Putin win, but we must also protect our people through these times. Wholesale prices are still trading at 120 pence a therm which is two and a half times their historic level and Ireland faces a particular challenge in this regard as we are a price-taker on international markets. Irish electricity and gas prices have historically been higher than other European countries due to long-standing circumstances such as geographical isolation, our dispersed population, our fossil-fuel dependence and our small market. The best long-term approach for Ireland to protect our consumer householders from volatility on those international wholesale energy markets is to invest in energy efficiency and renewable energy and to expand interconnection with European neighbour markets and deepen the internal market in energy which is what we are doing. That is why we must operate within a European market system.

In line with higher wholesale prices, household electricity and gas bills rose steeply in the final quarter of last year and have remained elevated since. The recent reduction in wholesale gas prices in Europe is welcome, although prices have remained significantly higher than pre-crisis levels. With wholesale energy costs accounting for a significant percentage of total supplier costs, a sustained period of falling wholesale gas prices can and will lead to retail market price reductions. However, supplier-hedging resulted in a significant proportion of energy purchased several months in advance and has impacted on the ability of suppliers to reduce prices notwithstanding the decline in the wholesale cost of gas. We, like others in this House, want to see that reduction happen as soon as it possibly can. However, due to the different forward-hedging strategies of energy suppliers before this winter we cannot force that on energy companies. Each has different circumstances as regards how far forward it has hedged. A more sustained period of lower wholesale prices may be needed before retail gas and electricity prices fall.

The action we took in the past 12 months was correct. We introduced a €2.4 billion package of supports last year and an additional package of one-off measures worth €2.5 billion in budget 2023. Last month, we announced a further €1.2 billion package to help and in April and May last year, 99% of eligible domestic electricity customers were credited with the first of the electricity credit payments. That was the appropriate measure to take. Look at what happened in the last year. On each of the four times we gave every household - 99.1% of households got this - a direct cash payment of €200, the number of houses in debt difficulty on their energy bills dropped by approximately 50,000. That is below historic norms. It is still hugely difficult. Gas bills are particularly challenging at present and as a Government we have said we will continue to review that. Those measures, combined with a large significant increase in social welfare payments - to give people real certainty, to give them cash to help them cope with exceptional and incredibly difficult bills - were the most important and best response.

It is not only that. We are developing the establishment by working with partners such as the Money Advice & Budgeting Service, MABS, to ensure support schemes are in place for those householders facing difficulties. We all know and are concerned about examples of householders who have bills they cannot pay. The best way is to work with organisations such as MABS, the Society of St. Vincent de Paul and the supply companies and to provide hardship funds so that in those circumstances no one is forced to go without heat or power. We have said consistently throughout the past two years of this crisis, especially to our older people who might be worried and decide to cut back on their heat and comfort, that people should not do that. There will be social welfare provisions to ensure they are able to provide for their basic most important energy needs, including their comfort and health through this difficult time through additional needs payments; hardship funds; working with people directly; and working with the supply companies to ensure they respond and engage with consumers. We also recognise this has the potential to affect - and has in many instances directly affected - businesses. That is why we introduced the temporary business energy support scheme and why we continue to amend it to ensure it hits the target and works for businesses. It is a better way of doing it. Rather than being dogmatic and ideological it is better to test market support systems and to keep evolving them and ensuring they deliver what we need to do. In August, following the Government's enacted legislation on the negative public service obligation, PSO, levy, the CRU published the annual PSO levy decision which outlined an annual saving of €89 per household electricity account. Last month we announced that all domestic bill-pay customers will automatically receive a monthly payment of €12.73 from March for seven months in 2023. Prepayment customers will receive the PSO payment through an adjustment in their daily charge. I could go on but the mechanism of giving the money directly to those households most affected through social welfare payments and giving every household credit cash supports was the right approach rather than some notional market cap that would be uncertain in terms of what the cost would be to the Irish public and the benefit to customers.

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