Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

Section 100 of the Finance Act 2022 requires that an assessment of the TBESS be carried out at intervals of not less than every three months, beginning on 20 October 2022. On 27 April 2023 I published the second three-month assessment of the scheme. The first assessment was published on 28 January. The assessment was undertaken by the Department of Finance with the assistance of the Department of the Environment, Climate and Communications and the Revenue Commissioners. It contains up-to-date data on the trajectory of energy prices, the impact from and effects of, energy prices on the economy, as well as other relevant issues relating to the operation to the scheme. It also contains details of amendments made to the scheme since the first assessment was published back in January.

As noted in the assessment, the worst-case scenarios for energy prices that were in prospect last autumn, when the TBESS and other schemes were being developed, have not materialised. A warmer-than-usual winter, as well as mitigation measures taken across Europe, have curbed demand for energy and led to reduced, rather than increased, energy prices. As a result, many businesses fell short of the thresholds built into the scheme as originally designed.

According to data provided by the Department of the Environment, Climate and Communications when compiling the assessment, this fall in energy prices is expected to continue, with prices for the second quarter of this year expected to be 24% lower relative to the first quarter. However, these data also show that gas prices remain significantly above - around double - levels seen in previous years. Notwithstanding the decline in energy prices at the wholesale level, it is taking time for reductions to filter through to business customers, as we know. As a consequence, I took the decision in February to exercise the power contained in the legislation to extend the scheme to the end of April and to increase the monthly limits on aid under the scheme.

This extension, together with a further extension to 31 May and additional enhancements provided for as part of the Finance Bill 2023, will allow more businesses to avail of the scheme and will provide increased relief. These enhancements include a reduction in the energy cost threshold for entry to the scheme from 50% to 30%, with effect from September 2022, and the increase in the amount of the temporary business energy payment from 40% to 50% of the eligible costs for the claim period from 1 March 2023 until the end of the scheme, subject to the relevant monthly limits.

Finally, as noted in the assessment, it is expected that these enhancements will result in an increase in the uptake of the scheme and will help businesses to mitigate the worst effects of the energy crisis.

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