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

This Government is just as concerned about protecting Irish householders in what is a very difficult time. We all absolutely accept that those households, in respect of their gas and electricity bills, are facing huge increases which have a huge impact on every family across the country and we are determined to protect them and to help our country through a difficult time.

It bears repeating that the causes of this lie in international factors as well as our dependence on fossil fuels. This means that it hits particularly hard here in Ireland because we use so much gas in generating electricity, in heating our homes and in powering our industry. It is that reliance on fossil fuels which is the underlying cause, together with the characteristics of the Irish market.

First and foremost, the prices in the past two years shot up because of the war in Ukraine where Russia used the supply of gas as a weapon of war. This had knock-on consequences, obviously, for the people Ukraine but also for the 450 million citizens across Europe and the wider rest of the world who have all seen a dramatic increase in prices because of those gas prices, in the first instance, going up to something like 13 times their historic average. These prices are still, while they have reduced from that high, some two and a half to three times their historic averages.

That is the cause of the problem and is the underlying issue we have to tackle. I want to set out today some of the measures by which we will do that and have protected our people, which we will continue to do. The measures we have developed are in direct cash payments and in targeted social welfare payments, as well as interventions like the introduction of a windfall tax, which we will introduce at a rate which is far higher than any other European government. We will introduce tax on the non-gas producing electricity supply companies at a rate which is far below; in other words the profits going to the relevant companies will be far less than they would be in other jurisdictions, contrary to what we have just heard.

First, I will set out some of the details of what has been happening and what we as a Government and the regulator have been doing to try to protect Irish householders at this time. The price increases were not ever due to Government or regulatory decisions. The immediate factor was that spike which happened as early as the first half, mid-term, in 2020, when we started to see the prices increasing. Data supplied by the Commission for Regulation of Utilities, CRU, indicate that average electricity and gas household bills have increased to a combined total of over €4,000 a year. At its peak, as I have said, in August last year wholesale gas prices on the UK gas spot market were trading at over 600p per therm, a 13-times multiple of the pre-pandemic level of 50p per therm. Due to high gas storage levels, warmer than normal winter conditions and policy efforts to reduce natural gas demand across Europe, wholesale gas prices have fallen dramatically and are currently below the peak values of last year. However, wholesale gas prices are still trading at approximately 120p per therm which is, as I said, two and a half times their historic pre-pandemic levels.

Ireland is a price taker on international markets. This means that Ireland has faced a particular challenge in this crisis. Irish electricity and gas prices have historically been higher than other EU countries due to long-standing factors such as geographical isolation, our dispersed population, our fossil fuel dependency and our small market scale.

In-line with high wholesale prices, household electricity and gas prices 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, however prices remain 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, will lead to retail market price reductions.

However, hedging by suppliers that results in a significant proportion of energy purchased over several months in advance, may impact the ability of suppliers to reduce prices, notwithstanding the decline in the wholesale cost of gas.

Yes, we will look at and talk to every company to ensure that they advance the cuts as quickly as possible. It is not something, however, that one can completely ignore or click one’s fingers and ignore the reality in the market where companies do typically hedge some 12 to 18 months in advance. That is why it will take time, as in other countries not just in Ireland but across Europe, for those retail prices to come down. We, like everybody else in this House, look forward to promote, deliver and to try to achieve that in whatever way we can but not by promising the impossible.

I want to now set out the response of Government to that cost-of-living crisis including the measures we have taken to keep our citizens warm and well over the past 12 months. We introduced a €2.4 billion package of supports during last year and an additional package of one-off measures worth €2.5 billion in budget 2023. In February of this year, we announced a further €1.2 billion package to help families, businesses, pensioners, carers and people with disabilities to cope with the rising cost of living. Through the first and the second electricity costs emergency benefit schemes, over 2.1 million households will have automatically received €800 of income support through their electricity bill at a total cost of €1.59 billion between the first quarter of 2022 and the second quarter of 2023. Approximately 99% of all eligible customers will have had the credit applied to their account. That worked and had an immediate effect in each of the instances in which it was applied in reducing the number of houses which were late with their payments. It also had the real benefit that it was low-cost, effective, easy to deliver and it worked. It worked, in particular, along with social welfare payments which protected those who were most vulnerable. One has to target what supports one has in this instance, in my mind, rather than a universal cap which would benefit every household. We did, do, should and will ensure that we target those who are most at risk. That is why the Government has increased funding for supports such as the fuel allowance, has reduced VAT on gas and electric bills, has reduced excise duty and has allocated a total of €267 million, of which €202 million comes from carbon tax receipts, to Sustainable Energy Authority of Ireland, SEAI, residential and community schemes, especially those targeting households at risk of energy poverty last year.

As well as the expansion of the fuel allowance scheme, the Department of Social Protection pays an electricity or gas allowance under the household benefits scheme and a further €203 million will have been spent on this scheme last year. Over 483,000 households have been expected to benefit from this.

Budget 2023 also increased the total allocation of the SEAI by 36% up to €480 million. This is the highest ever budget to support the achievement of our retrofit targets.

Last year, 4,438 free upgrades were provided to homes at risk of energy poverty through SEAI's warmer homes and warmth and well-being schemes.

This year a total of €235 million will be spent by the SEAI on dedicated energy poverty schemes and local authority retrofits. The funding will target 6,000 free upgrades in the warmer homes scheme and 2,400 B2 retrofits of local authority homes. That is effective protection for householders and reduces our dependence on fossil fuels in the long run, which ensures they can make savings for the entire time they are staying in the house.

Protecting jobs is protecting families during this energy crisis. We did that with the temporary business energy support scheme, TBESS. The level of relief is set to increase to €10,000 per month. The threshold for qualification has been lowered from a 50% increase in electricity and gas costs to 30%. These changes will apply retrospectively from the start of last year.

To set the record straight, we very much supported the introduction of a windfall tax on supernormal profits of energy companies and electricity generators to help support our customers. That legislation is written and has been presented to the Oireachtas joint committee, which is doing its pre-legislative scrutiny. We will introduce it at the highest rates of any European country. It will be 75% on the profits of fossil fuel companies this year and for those-----

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