Róisín Shortall (Dublin North West, Social Democrats) | Oireachtas source

I welcome the opportunity to contribute to this debate on affordable electricity. Since the beginning of the cost-of-living crisis, spiralling energy costs have had a devastating impact on many families and workers. Many have been forced to make the stark choice between the various essentials in any family budget and trying to decide which of those essentials they will drop in order to be able to afford to meet their energy bills. That is no way for any family to have to live. In households across the country, some families continue to struggle to clear their bills before the next one arrives. The situation can be particularly difficult for pre-pay customers. While winter may be behind us, the crisis certainly is not.

Figures released by the CRU last month showed that 10% of electricity customers were still in arrears while 25% of gas customers were behind on their bills. Just yesterday, the Vincentian MESL Research Centre published its minimum essential standards of living report for 2024. That report showed a significant reduction in energy costs when compared with the 2023 costs, with an average decrease of 24.9% in urban areas and 12.2% in rural areas. Those figures may seem good on the surface, but compared with 2020, there has been a 64.5% increase in energy costs. As a result of this staggering increase, too many households remain in energy poverty. According to the Government's own energy poverty action plan, this is when energy costs account for 10% of net household income.

The 2024 MESL report found that a number of social welfare recipients continue to live in energy poverty. This includes single adults whose energy costs account for almost 12% of their household income and lone parents with two children where over 11% of household income goes on energy. The older single adult household type showed the greatest level of change from 2020 to 2024. The share of their income allocated to minimum energy needs increased by 4.1 percentage points, from 6% in 2020 to over 10% in 2024.

Clearly, despite recent drops in energy costs, a broad gap remains between household energy and social welfare income, leaving low-income households very vulnerable to energy poverty. That is why this Government’s untargeted and frankly wasteful response to the energy crisis must be called out. In the last two budgets, millions of euro went to households that simply did not need it.

The Social Democrats have consistently called for a greater focus on low- and middle-income households. In our alternative budget, we called for the establishment of an energy crisis subsidy scheme. This would have provided direct cash transfers to households on a graduated basis related to income. Last year, we also proposed a €15 per week increase in the fuel allowance to €48 per week, as well as an expansion of its eligibility to include the working family payment recipients. Instead, this Government retained the €33 per week rate, leaving the payment frozen. That was the third year in which that was done. Meanwhile, millions and millions of euro went to people who did not need it at all. I accept that electricity credits help to supplement the reduced value of the core rate for fuel allowance, but that is no excuse for not raising it. Budget 2025 must provide an increase in that critical payment.

In respect of market regulation, this Government has been too hands-off throughout the entire energy crisis. On the foot of an EU regulation, the Minister, Deputy Ryan, introduced a windfall tax, but that was just one of a range of measures he could have availed of to tackle high prices. Other European countries introduced retail price regulation. In fact, Ireland was one of only two countries in Europe not to bring in retail price regulation and countries such as France and Spain also implemented wholesale price regulation. Clearly, there were other measures open to this Government under EU rules, but it failed to implement them, and it was the customers who paid the price of that inaction on the part of the Government.

It is also clear that the CRU requires more powers. It needs teeth to protect customers from hedging practices and anti-competitive behaviour, which we have seen right across the energy market. Last year, the Central Bank of Ireland said that Irish energy prices were out of line with Europe because energy companies were failing to transfer reductions to their customers. Figures released by the CSO last September revealed that wholesale electricity prices had dropped by 72.5% in August 2023. Despite this, there had only been a 3% decrease in electricity prices by February of this year, according to the household energy price index, HEPI. The index also found that electricity prices in Dublin remained 66.4% higher than the average in other European member states. That is a staggering figure. When so many other aspects of the cost of living are so high for people living in this country, that is a shocking figure.

Even with the further decreases that have happened since then, there is still a completely unacceptable lag between wholesale energy prices coming down and those savings being passed on to consumers. While any decrease in bills is to be welcomed, we must not lose sight of the fact that these reductions are coming from a very high base, not to mention the obscene profits that are being made by many of those companies.

Finally, I would like to focus on energy consumption. In recent years, there has been a great reduction in electricity use and emissions from the residential sector, but there has been no curb on the consumption of large-scale energy users, such as data centres. My colleague, Deputy Whitmore, has been pursuing this issue for quite some time. She has repeatedly called on the CRU to be charged with examining the impact of data centres, not just on energy consumption and emissions, but also on pricing. Currently, each Government Department or State body deals with separate components of these energy-intensive data centres, and incredibly, the CRU does not maintain a list or register of data centres.

When the CSO released its data centre figures last year, it was evident that it had to scramble to collect information from a number of different sources. I accept that data centres are required in the digital age, but they must be efficient, well managed and regulated, and this is not happening at the moment. The State must also not become beholden to tech companies and powerful lobbying groups. We should not fall foul of their scare tactics at the expense of our energy security or climate action. The real-world ramifications of these data centres on our energy infrastructure and climate targets must be examined closely. Ultimately, a far more aggressive approach is required to tackle long-term energy costs and improve our energy resilience.

The Minister’s patting himself on the back for failure just does not cut it anymore. It is time for a more ambitious, State-led effort to ensure that households are protected from energy prices and supply shocks, as well as creating a much more sustainable Ireland. That is why we in the Social Democrats have consistently called for massive investment in solar panels, an expanded retrofitting grant scheme and the introduction of a pay-as-you-save home installation loan scheme. The time for dithering is over. We need to get serious about the scale of this crisis.

See this speech in context