Wednesday, 6 October 2021
Energy Prices: Motion [Private Members]
“That Dáil Éireann: recognises:— that energy prices are currently rising rapidly worldwide;notes that:
— the fact that data centres currently take up 11 per cent of electricity produced in Ireland is adding to upward pressure on energy prices, as predicted by Moody’s in 2018;
— that according to the Economic and Social Research Institute, one in six households were in energy poverty in 2019;
— that according to research published by the Society of St. Vincent de Paul in collaboration with RED C Research & Marketing Ltd in March 2021, 19 per cent of people cut back on heating and electricity due to cost, including 42 per cent of those with an illness or disability and 36 per cent of lone parent families;
— that there are between 1,500 and 2,000 excess winter deaths each year, a large percentage of which can be attributed to inadequate heating;
— that many households could be facing an increase in heating and electricity costs of more than €500 annually as a result of the energy price increases;
— that the Fuel Allowance is only paid to 380,000 households, which means a majority 1727 of pensioners as well as low paid workers do not receive it and are not protected from these increases;
— that the low level of energy efficiency of the Irish housing stock means that households are particularly impacted by energy price increases and contributes to high levels of carbon emissions; and
— that the rapid electrification of all sectors of the economy including housing and transport and shifting from fossil fuels to renewable energy for electricity generation is crucial if we are to transition to a zero carbon economy;— the deregulation of the energy supply market and the privatisation of Bord Gáis Energy in 2014 was disastrous for ordinary people;calls on the Government to:
— when the ESB’s statutory requirement to operate on a not-for-profit and break-even basis was repealed in 2001 electricity prices rose dramatically, resulting in energy poverty, disconnections and an annual 2,800 excess of cold-related deaths;
— the Government has committed to increase carbon tax year-on-year, which is currently set at €33.50 per tonne on fuel and is set to increase by €7.50 per tonne next year;
— the Government’s retrofitting programme, which only targeted retrofitting 2,400 social homes in 2021 out of a total stock of over 160,000, is entirely inadequate; and
— carbon taxes are a regressive form of taxation, that disproportionately impact on lower income individuals and families, and are highly ineffective in making the necessary changes to decarbonise our economy; and— issue an emergency order under section 61 of the Consumer Protection Act 2007 in relation to the supply of electricity, gas and home heating oil;
— fix a maximum unit price on electricity, gas and home heating oil under section 62 of the Consumer Protection Act 2007;
— at a minimum, not to increase the carbon tax in Budget 2022, as a step towards replacing the carbon tax with a pollution tax on the profits of big polluters, including the fossil fuel industry, big agri-business and data centres;
— implement a national retrofit plan to retrofit every public building and home in the State by 2030, prioritising local authority housing and the homes of those facing fuel poverty;
— increase the rate of Fuel Allowance by €15 a week and increase the means test for eligibility for Fuel Allowance from €100 a week above the State Contributory Pension to €200 a week above the State Contributory Pension; and
— renationalise the energy supply sector, using a publicly owned and democratically controlled energy company to drive a rapid and just transition to a zero carbon economy, including large scale public investment in offshore wind energy.”
I am sharing time with Deputy Barry.
A huge crisis is either hitting and is about to hit hundreds of thousands of households across the country. It is the crisis of soaring bills for electricity, gas and heating oil. Many people will be faced with the choice of paying to heat their homes properly or putting food on the table. That choice is faced by one in five or six households. This is the number of people who struggle to pay their heating bills. Now, with those bills rising, they will be put under even more pressure. This is an international phenomenon. There is no question about that. There is an extra edge here, however, in terms of the data centres. I am sure we will come to that. Other governments throughout Europe that are far from being socialist, under pressure from below, in Spain and Italy, for example, have moved to take some action to defend certain sections of the population from this increase in prices and shield them from that choice of buying food or heating their homes. The Government here proposes to wring its hands, say how bad things are then, according to its countermotion, propose nothing to alleviate the burden facing people but reassure them that competition between suppliers is an important means of exerting downward pressure on electricity prices and that they should not worry because neoliberalism and capitalism will sort it out in the long term.
Energia recently announced its third price increase of the year. In total, it has increased electricity prices by 45% and gas prices by 42% in the past 12 months. That is more than €800 for the average household. Other companies have done something similar. What is the Government planning to do about this? Not only is it planning to do nothing to address prices, next week it plans to announce a further 22% increase in the carbon tax. With one in five already having to cut back on light and heat for their homes due to the costs, the Government plans to add to the problem and drive even more people into fuel poverty.
The carbon tax does nothing to help people reduce their fuel bills or their carbon footprints. Our motion says that, at the very least, it should not be increased any further in this year's budget. In reality, it should be scrapped and replaced with a pollution tax on those who are responsible for pollution. In other words, such a tax should be levied on the profits of the big business polluters, data centres, big agribusiness, fossil fuels and so on. It is time to tackle both the profiteering and the power of the private energy companies.
The Government likes to pretend that there is basically nothing it can do in the face of market forces driving energy prices up. It can actually do something extremely simple, however, and it could do it today. At the stroke of a ministerial pen, it could declare an emergency in the supply of electricity and energy. Another stroke of a pen could set a maximum price to protect people from these increases. The Government has in its power the capacity to put an end to these energy price hikes.
The greed of big energy companies has added fuel to the fire of rising energy prices here. Privatisation has not delivered the promised affordability and efficiency. It has been a complete disaster. Energy prices in Ireland were already 23% above the EU average prior to this crisis. Across the globe, energy price hikes are highest in states with privatised networks. Investment in improving services and switching to renewables has not happened; instead, we have had bloated marketing and managerial budgets and profit margins driving up prices. Instead of improving services for ordinary people, privatisation has made life more difficult, with customers having to spend hours researching every year to find the best places. The latter adds another unnecessary task to overburdened lives. The privatisation experiment is a failure from the point of view of workers, ordinary householders and, crucially, the environment.
As part of a socialist green new deal, we should bring the energy sector fully back into public ownership, cut out the profiteering, create thousands of decent jobs and invest in a rapid and just transition to 100% renewable energy. Instead of that green new deal, the Government is overseeing a dirty old industry. This year has seen the coal-fired Moneypoint station ramp up production. The Green party got into power and our use of coal, the dirtiest fossil fuel, increased. Moneypoint is one of the most environmentally destructive sites in the entire country. The fact that we are almost one quarter of the way through this century and still reliant on coal energy plants is testament to the abysmal failure to invest in renewable energy production. Our usage of tidal power and offshore wind power is still minimal in comparison with similar-sized countries such as Denmark. Instead of the profits in the energy sector being reinvested into renewables, they have been siphoned off. Public ownership of the energy sector would allow us to direct all resources to the just transition to which I refer and shut the likes of Moneypoint down for good.
On the fuel allowance, the Government's countermotion simply refers to the current level. It is a payment of €28 per week for 28 weeks to more than 370,000 low-income households. That means a majority of those who will be hard hit and faced with difficult choices in the context of energy prices do not currently avail of fuel allowance. The level of the fuel allowance is inadequate. Something simple that can be done is to increase the fuel allowance by the level at which energy prices are rising, €15 per week, and extend eligibility in order that all those suffering and faced with that choice have the ability to avail of the protection afforded by it.
A crucial reason we are hit so hard by energy price rises is the poor state of our housing stock in terms of energy efficiency. The Government's plans, the targets in which it has not met so far, are completely inadequate. We should aim to completely retrofit all our public buildings and public homes, including local authority and approved housing body homes, by 2030. Instead, the Government's target was to retrofit 2,400 social homes in 2021 out of a total stock of more than 160,000. Retrofitting ordinary people's homes is a good example of the kind of policies that make up an eco-socialist green new deal. These are things that simultaneously improve people's lives while tackling the environmental crisis.
I will conclude by referring again to privatisation because I find it incredible that the bottom line of the Government's countermotion is that "competition between suppliers is an important means of exerting downward pressure on electricity prices". In other words, continue to let the market rip and eventually that will help ordinary people. There is no evidence for that. I gave the example previously of the difference in prices between European countries with privatised versus non-privatised markets. Non-privatised is better. In Ireland, the development of the ESB was historic and involved the nationalisation of 300 expensive, badly run, inefficient private and local authority undertakings.
This is from an article by Ms Sinéad Mercier. It was described by a newspaper at the time as the first fruits of Bolshevism in the country, but it was enormously successful. When it was privatised, the ESB was forced to artificially increase its prices to attract competitors into a new energy market on which the State spent million/+ creating. The very same story is seen internationally. For example, in Australia a study found that price rises have been highest in states with privatised electricity markets. Continuing the reliance on the privatisation of markets is a disaster from the points of view of the environment, workers and ordinary householders.
I am acutely aware that when we discuss this topic we are talking about matters of life and death. If the Government continues to refuse to intervene boldly to protect people from energy price rises, not only will that severely eat into the budgets of large numbers of households but people will die. That is not hyperbole from these benches. There is such a thing as excess winter deaths. I have been trying to get my head around the concept of excess winter deaths in preparation for this debate. As I understand it, it involves looking at the number of deaths that take place in the State for a period of months, basically, December to March, and comparing it to the number for comparable periods in terms of time, not comparable periods in terms of temperature and cold weather, and seeing how many extra deaths occur. The numbers go up and down in any given year, but they generally tend to be between 1,500 and 2,000. Think about that. It is shocking. Among women, there tend to be more deaths as a result of respiratory issues and among men there tend to be more deaths as a result of cardiovascular issues. However, the end result is the same.
This is an issue that overwhelmingly, although not exclusively, affects elderly people. If one is elderly, one is seven times more likely to be hospitalised during a cold snap in those winter months than if one is aged between 18 and 44 years. If one is poor, one is two and a half times more likely to be hospitalised in that period than somebody from one of the wealthiest communities. These are issues that affect a broad swathe of people in society, but the effect is overwhelmingly concentrated on people who are older and people who are poorer. They suffer not merely from the cold weather, and there is not much we can do about that, but also from fuel poverty. Fuel poverty is an issue here, and it is a matter of life and death. To put it in context, more than 3,500 people lost their lives in the Troubles in Northern Ireland, which played out over a period of decades. That number would be overtaken in a couple of years by the number of excess winter deaths we have in this country, which is, by the way, the highest in Europe. That is a result of fuel poverty, which is a legacy of capitalism and a legacy of successive Fianna Fáil and Fine Gael led governments, even though they might include the Green Party as a decoration in this one.
To show that these problems are man-made, let us consider a case example. The ESB, an extremely successful company, was a State company. It kept prices low for decades, in large measure to facilitate the industrialisation of this country after 1958. When Mr. Lemass and the Government wanted to secure foreign direct investment the selling point was not necessarily the corporation tax at that time. The selling point included a number of things, but cheap electricity was a big part of it. The ESB was a not-for-profit company until 2001. That changed in 2001 when it ceased to be a not-for-profit company. Fianna Fáil and the Progressive Democrates, PDs, were in power. Were they under pressure from the European Union's neoliberal regulations? Yes, they were, but they embraced them with enthusiasm, and the private operators began to come into the market. To be clear about what happened then, the ESB was no longer a not-for-profit company. As the private operators could not compete with the low prices being charged by the State company, the State company's prices had to rise in order to let private operators into the market, and in they came.
There was another round of deregulation in 2011. We were told the ESB would now be able to compete with the private operators and that if people shopped around, competition would drive down profit. It did in my neck. Prices in this country were below the European Union average up to 2011, but by the third and fourth quarters of 2019 the price of electricity here was 11% above the EU average and the price of gas was 12% above the EU average. The ESB's operating profits for 2019 were €682 million and for 2020 they were €616 million. The combined profit over a mere two years was €1.3 billion. Imagine if we turned back the clock to 2001 and the ESB was a not-for-profit company and we used not even all, but a significant portion, of that €1.3 billion to cut the prices of electricity. They could be cut by a serious amount. The problem here is that Fianna Fáil and Fine Gael Governments, with the Green Party also in government, are presiding over the market. Market madness is what we are dealing with here and it must be tackled.
Can anything be done? Some steps have been taken, not nearly enough, under pressure from below by governments in Greece, Italy and Spain. In Spain, VAT was cut from 21% to 10%, tariffs on bills were cut from 5% to 0.5%, there were no disconnections for ten months and there was a levy on power plants of €2.6 billion, with the break given to the consumers. I do not believe that goes far enough, and there are people in Spain who do not believe it goes far enough. I understand the rank and file of the Podemos organisation, with the support of some of its members of parliament, believe there should be a national public energy company, in other words, not just tax concessions but public ownership. Contrast that to the absolutely pitiful response of the Government in this State. It is leaving people prey to the ravages of market forces. People in this country, mainly elderly and mainly poor people, will die as a result of the Government's policies. That is a fact. Is the Government going to change its policies? The Minister of State might throw up his hands and ask what can be done. This motion spells out quite clearly some steps that can be taken. Incidentally, one that we omitted to mention - I will say it is a sin of omission - is that there should be a complete ban on electricity disconnections. There were 1,000 electricity disconnections and 400 gas disconnections in this country in 2019. That has to be knocked on the head and brought to zero.
We must have maximum prices. The Minister has the power to do it if he declares an emergency under the legislation that is in place. He should declare an emergency. We must abolish the carbon tax. If the Government is not prepared to abolish its precious carbon tax, it should at least freeze it for this year. The fuel allowance has to increase. We suggest an increase of €15, which is quite a modest figure, as a minimum. The allowance must be extended for an extra four weeks and it should be available to all social welfare recipients. The ESB should go back to being a not-for-profit company. The energy sector should not be run by private business on a for-profit basis. It should be run on a public basis for the needs of all and for the needs of society.
We have had enough of this market madness. We have had enough of this precarity and this shadow hanging over so many homes coming into the winter, with the threat of energy prices and, for many people, the threat of illness and possibly death as well. This must be ended with bold, radical, socialist policies. I want the Minister of State to respond to the specific proposals, particularly that of which he has been a champion, namely, the carbon tax. How the hell can the Government increase the carbon tax on the scale it plans this year while people have this crisis hanging over them?
I move amendment No. 1:
To delete all words after “Dáil Éireann” and substitute the following: “notes that:
— the Government is acutely aware of the recent energy price increases and their impact on households;
— electricity and gas retail price rises, both in Ireland and across Europe, are predominantly related to current international wholesale gas price increases which are in turn reflective of market developments, and these international factors may moderate after this winter;
— Ireland faces particular challenges in this regard as we are a price taker on international markets and that Irish electricity and gas prices have historically been higher than other European Union (EU) countries due to long-standing drivers such as geographical isolation, dispersed population, fossil fuel dependency and small market scale;
— the long-standing policy of successive Governments has been that competitive energy markets result in greater choice for consumers and businesses, in terms of suppliers, products and prices;
— electricity and gas retail markets in Ireland operate within a European regulatory regime wherein electricity and gas markets are competitive;
— operating within this overall EU framework, responsibility for the regulation of the electricity and gas markets is a matter for the Commission for Regulation of Utilities (CRU), which was assigned responsibility for the regulation of the Irish electricity and gas markets following the enactment of the Electricity Regulation Act 1999;
— as part of its statutory role, the CRU also has consumer protection functions, including the monitoring of energy retail markets to ensure that competition continues to develop for the benefit of the consumer;
— under the CRU’s consumer protection functions it has provided for priority and vulnerable customers in the various Codes of Practice in the CRU’s Electricity and Gas Suppliers’ Handbook; and
— the CRU is accountable for the performance of its functions, including on consumer protection, to a Joint Committee of the Oireachtas;
further notes that:
— carbon pricing is an essential element of any credible plan to decarbonise the economy; and
— greenhouse gas emissions from electricity and heat generation, energy-intensive industry sectors and commercial aviation within the European Economic Area are priced through the EU’s Emissions Trading System; and
— that the best long-term approach for Ireland to insulate consumers from volatility on international wholesale energy markets is to invest in energy efficiency, renewable energy and expand interconnection with European and neighbouring markets to deepen the internal market and competition;
— that the Government is committed to supporting households with their energy costs through energy efficiency measures, with a total retrofit budget in excess of €280 million;
— that over three-quarters of this retrofit budget is targeted at either local authority housing or low-income private households through the Sustainable Energy Authority of Ireland’s energy poverty retrofit schemes;
— that the Government’s ‘Project Ireland 2040 – National Development Plan 2021-2030’ provides for an expanded investment well in excess of a billion euro in retrofit between now and 2025;
— that additionally the Government is committed to ringfencing all additional carbon tax revenue as follows:
— approximately one third will be spent on targeted social welfare and other initiatives to prevent fuel poverty and to ensure a just transition;
— just over half will be spent on socially progressive residential retrofitting programmes; and
— the remainder will be spent on incentives for farmers to farm in a greener and more sustainable way;
— that the Government will provide additional social welfare support in the Budget to protect the most vulnerable against fuel price increases;
— that the following social welfare measures can help to alleviate fuel poverty:
— the Fuel Allowance is a payment of €28 per week for 28 weeks (a total of €784 each year) from October to April, to over 370,000 low income households, at an estimated cost of €300 million in 2021;
— the Household Benefits Package, which consists of a set of allowances which help with the costs of running a household, includes allowances towards covering electricity or gas costs and recipients are paid €35 per month;
— under the Supplementary Welfare Allowance scheme a special heating supplement may be paid to assist people in certain circumstances, and exceptional needs payments may be made to help meet an essential, once-off cost which an applicant is unable to meet from his/her own resources; and
— the Living Alone Allowance, which is targeted at recipients of certain social welfare allowances who live alone and often have significantly higher heating costs, is paid at a rate of €19 per week in addition to a primary social welfare payment such as the State pension;
— that, in the long-term, competition between suppliers is an important means of exerting downward pressure on electricity prices; and
— its commitment to a review of the implementation of the Strategy to Combat Energy Poverty (2016) due to be completed by the end of the year.”
I will respond immediately to Deputy Barry's question about increases in carbon tax and where that money should go. It is Government policy that the revenue from any increase in carbon tax should be ring-fenced and should go directly towards alleviating any negative effects on people who cannot afford the increases in the price of energy. This means that half of all the increases in carbon taxes should go towards retrofitting and energy efficiency for homes, a third goes towards increases in welfare and the remainder goes towards increasing the incomes of people in farming, and that is right. It is also Government policy that the distribution and transmission of electricity should remain in State hands. It is a natural monopoly. There is major investment, operation and activity on the part of State-owned companies in the generation of electricity in Ireland. Approximately 40% of electricity produced here is generated by State-owned companies.
I thank Deputies for raising these important matters and for allowing us time to discuss them today. Clearly, the current situation, whereby we are witnessing significant increases in international gas prices and their knock-on effects in the Irish market, is a matter of serious concern to the Government. The Government fully accepts that recent electricity and gas price increases will make it difficult for consumers to meet their bills, especially in the current economic climate. In speaking to the Government's amendment to the motion, I will deal with substantive elements of Government policy and household supports for energy costs. First I will set out the global developments that have affected Irish energy prices. I will then set out for Deputies the functions of the independent regulator, the Commission for Regulation of Utilities, CRU, in respect of these matters, including its highly relevant activities in consumer protection and monitoring competition. Finally, I will set out for Deputies the amendment I have tabled to the motion.
As part of describing our amendment, I will outline what the Government is doing to provide significant supports for household energy costs in terms of both energy efficiency and welfare supports. It is important to recognise that these price increases are not Government or even regulatory decisions. This is because price regulation ended many years ago. Suppliers compete with one another on prices and set their own prices accordingly, as one would expect.
I will outline what has been happening with world energy prices. Increases in wholesale energy prices, following rises in international gas prices, have been the principal driver of these increases. These increases have been felt across Europe; they are not just an Irish phenomenon. These prices reflect the costs suppliers face, including wholesale gas costs. The most immediate factor affecting electricity prices in Ireland is the upward trend in international gas prices. In Europe, wholesale natural gas prices have been on an upward curve since the second half of 2020. This feeds directly through to retail electricity prices as the wholesale price of electricity correlates strongly with the price of gas. Various commentators, including the International Energy Agency, have stated that both demand and supply factors have contributed to a tightening of the European gas market. Such factors include increased demand due to post-Covid recovery, supply constraints in Europe and increased demand in Asia. European gas reserves are low. What was used during winter 2020 was not replenished during the summer months. The ongoing need to replenish these reserves means higher gas imports. This has fostered competition between Europe and Asia for supplies and, thus, a further increase in gas prices. As previously stated, all European markets are experiencing these price increases. Deputies will further appreciate that we face additional costs due to our geographical location, our fossil fuel dependency, the small scale of the Irish market, our low population density and exchange rate fluctuations.
I now turn to the regulatory role of the CRU. Deputies should be aware that the CRU, the independent energy regulator, has a wide range of economic and customer protection responsibilities in this area. As part of its statutory code, the CRU has consumer protection functions and monitors energy retail markets to ensure that competition continues to develop to benefit the consumer. The CRU also oversees non-price aspects of competition and has taken and continues to take steps to increase transparency and consumer engagement in retail markets. This includes, for example, developing various codes of practice and setting out customers' rights found in the suppliers' handbook. Additionally, the CRU certifies price comparison websites, leads the smart metering roll-out and participates in initiatives such as the supplier-led voluntary energy engage code, whereby suppliers will not disconnect a customer who is engaging with them. I note that the CRU recently appeared before the Oireachtas joint committee to which it is accountable.
I now turn to the Government's amendment to the motion. The amendment acknowledges that international energy prices have been increasing and that these increases are having knock-on impacts on households. The amendment also asks that Dáil Éireann note that Ireland faces particular challenges in this regard as we are a price taker on international markets and that Irish electricity and gas prices have historically been higher than those in other EU countries due to long-standing drivers such as geographical isolation, dispersed population, fossil fuel dependency and small market scale. The amendment upholds the Government's conviction that the best long-term approach for Ireland is to insulate consumers from volatility on international wholesale energy markets, to invest in energy efficiency and renewable energy, to expand interconnection with Europe and neighbouring markets and to deepen the internal market in energy. The amendment notes that carbon pricing is an essential element of any credible plan to decarbonise the economy and, furthermore, the Government's increasing ambition for renewable electricity to reach at least 70% by 2030 and the commitment to a greenhouse gas emissions reduction of 51% by the end of the decade.
I wish to highlight the parts of the amendment which deal with the extensive Government supports that are in place. The amendment affirms the Government's support for energy efficiency, where supports are considerable, with a total retrofit budget of €280 million. This funding will mean that more households will be able to receive free energy efficiency upgrades, making their homes warmer, healthier and cheaper to run, in line with the programme for Government. The amendment states that the Government's commitment, via its Project 2040 national development plan, provides for an expanded investment in retrofitting of well in excess of €1 billion between now and 2025. The amendment upholds support for a deepening competition between suppliers as an important means of exerting downward pressure on electricity prices. Customers can and should ensure that they are availing of the best offer available in the market by switching supplier or renegotiating with their existing supplier.
The amendment further affirms the Government's continuing commitment to protect the most vulnerable through extensive supports for household energy costs via welfare schemes and the commitment to review the implementation of the strategy to combat energy poverty by the end of the year. The fuel allowance is just one of a range of income supports paid by the Department of Social Protection. Those supports include general social welfare schemes, the living alone increases to support those living alone and at a higher risk of poverty and the household benefits package.
On 27 September, the Minister for Social Protection announced the start of the national fuel scheme for the 2021-22 season. A budget of €292 million has been set aside for the upcoming season to pay an estimated 370,000 households. The fuel allowance is available to long-term social welfare recipients and amounts to a payment of €28 per week for 28 weeks, a total of €784 each year from October to April. In launching the winter fuel allowance on 26 September, the Minister for Social Protection noted that heating costs are a concern for many, that households have seen their bills increase and that this will be an important factor as budget 2022 negotiations continue.
The household benefits package consists of a set of allowances which help with the costs of running a household. It includes allowances towards covering electricity or gas costs. Recipients, the majority of whom are pensioners, are paid €35 per month. The Department of Social Protection will spend approximately €195 million this year on the household benefits package for more than 470,000 customers. Targeted supports are also provided under the supplementary welfare allowance scheme, exceptional needs payments and urgent needs payments. These may be made to help meet an essential one-off cost which an applicant is unable to meet out of his or her own resources.
All the funds raised by increases in the carbon tax have been ring-fenced to protect those most exposed to higher fuel and energy costs and they will be allocated as follows: one third to ensure the increase in carbon tax is progressive, through targeted social welfare and other increases to prevent fuel poverty and to ensure a just transition; one half to fund a socially progressive national retrofitting programme targeting all homes but with a particular emphasis on the midlands region and on social and low-income tenancies; and the remainder to allocate funding to a rural environment protection scheme, REPS, 2 programme to encourage and incentivise farmers to farm in a greener and more sustainable way.
Finally, and importantly, the amendment further commits that the Government will provide additional social welfare supports in the budget to protect the most vulnerable against fuel price increases.
The Government is acutely aware of the financial challenges faced by households due to these price rises and is serious about providing practical supports. As I have highlighted, government has long provided and will continue to provide practical supports for those struggling with their energy costs. The Government continues to allocate significant funding to these practical supports via the welfare system, energy efficiency grants and retrofitting.
To put it simply and bluntly, energy poverty is going to kill several thousand of our most vulnerable citizens this winter. So-called climate action in the form of the carbon tax is going to kill many thousands of our most vulnerable and elderly citizens this winter unless the Government does something about it. That is what we are appealing to the Minister of State to do.
We are edging our way out of a public health emergency during which 5,000 people died tragically. The pandemic prompted the Government, correctly, to spend €24 billion to prevent deaths in a public health emergency. Our motion asserts that this is a public health emergency. In exactly the same way that Covid-19 was a public health emergency and required an unprecedented response to prevent unnecessary deaths of the vulnerable, this is a public health emergency but it is not one that is confined to one year. It is an ongoing public health emergency where the sick, the elderly and the poor die as a result of the lack of resources available to them to heat their homes. The Government has a responsibility to recognise that public health emergency in the same way as it recognised the Covid emergency and make unprecedented efforts to ensure unnecessary deaths do not happen among our older, more vulnerable and poorer sections of our society.
Those who are vulnerable do not make up a small cohort. The Society of St. Vincent de Paul estimates that 19% of people - almost one fifth of our entire population - are cutting back on the use of electricity and heating because they cannot afford it. Some of those people die as a result. Those deaths and the hardship and suffering of those who must turn down the heat and shiver in the cold this winter are the Government's responsibility. It is something it can address but if its amendment is an indication of its response, it is clearly not going to address it. It will allow unnecessary deaths to continue. It will fail to recognise that this is a public health emergency and will allow the vulnerable, the poor and the elderly to suffer and some of them to die because it will not recognise how serious this issue is.
This is a year-on-year public health emergency but it has got substantially worse. We must, therefore, fear what the potential casualties will be at the end of the winter season if the Government does not act. We are talking about two, three and four energy price hikes over the past year. This results in €100, €400 or up to €500 per year in additional costs for electricity and heating. Overwhelmingly, the burden of those increases will fall on the people who have the least ability to do anything about them, not only because they are on low incomes but also because they are disproportionately concentrated in houses with extremely poor insulation and have to use disproportionate amounts of energy to keep their houses warm. In the case of social housing tenants, they have no control over the level of insulation in their homes because it is up to the local authority and Government to retrofit their homes.
It is nauseating to have the Government in its amendment and, again, in the Minister of State's speech suggest that the retrofit programme is anything other than pitiful. In respect of our motion, Deputy Paul Murphy was incorrect. It was too generous in respect of the target the Minister of State said he was trying to meet. The revised Estimates for 2021 showed that only €25 million was put into the social housing retrofit programme. The target of 1,670 retrofits was not met. It had to be revised down once or twice during the course of the year because the Government and local authorities failed spectacularly to meet it. This is against a total social housing stock of 137,000. Even in the much-lauded and trumpeted national development plan, the Government is only proposing to retrofit one quarter - 37,000 homes - of the entire social housing stock by 2030. Three quarters of those in social housing will not have their homes retrofitted at the end of the national development plan. The amount of investment is pathetic. In terms of the private grants available for private homeowners, the maximum grant someone can get is just under €15,000. Not surprisingly, the SEAI's targets for home retrofits were not met either because, of course, the actual cost of retrofitting a home is anywhere between €35,000 and €70,000 if someone wants to achieve a BER A rating.
The Government is failing spectacularly and is demonstrating no willingness to implement the just transition, which means not unloading the cost of carbon taxes and climate measures on the people who cannot afford them. People who are rich can of course retrofit their homes. They can manage to pay €70,000 but how on earth are people living in social housing, low-paid workers or pensioners going to get €35,000 or €70,000 to retrofit their homes when the grants available are about €15,000? They cannot do so. For this reason, we need to dramatically increase investment, which, by the way, would save millions. I do not have the time to set out how.
Our proposal for the forthcoming budget is to retrofit 50,000 homes per year, moving up to 100,000 per annum. The savings would be dramatic. We would save about €206 million per year for every 50,000 homes we retrofit. In the meantime, until the Government steps up to the mark in terms of retrofitting people's homes so they can reduce their heating and energy use, it is nothing short of punishment to impose further increases in the carbon tax on people who have no control over the level of heat and energy they must use in their homes to keep themselves warm and, in some cases, alive. It is criminal to continue to impose carbon taxes on these people.
We should not only defer the carbon tax increase, we should abolish it because it is fundamentally regressive. We should impose it on the real big polluters, the beef barons and big corporations that are responsible for huge amounts of emissions. We should not impose it on the poor, pensioners, the sick and the vulnerable, which is what the Government is proposing to do with this carbon tax increase. If it recognised that there was an emergency with Covid-19, took unprecedented measures and made levels of unprecedented State intervention to match the public health emergency, by God, it would be justified in declaring an emergency in energy costs and energy supply. It has the legal mechanisms to do so and impose maximum unit prices for energy and electricity. Why will it not do that? It would be unconscionable if the Government refused to do it.
I ask the Government to think again about what it is doing. Has it learned anything from the Covid-19 pandemic about the importance of public health and how we are all in this together? Are we seriously going to allow to continue the obscenity and scandal of the poor, vulnerable, elderly and sick dying because of a lack of heating in their homes and the financial pressures the Government is willing to impose on them through carbon taxes and absolutely obscene levels of energy pricing from an energy sector that has become completely consumed by profit? The price of energy supplies is being driven up by the greed of entities like the big information technology companies that want to build data centres. The Government wants to facilitate them but they are driving up prices and reducing the level of available energy.
That is a demonstration of Government priorities. The big multinationals come first but the sick, elderly, poor and vulnerable will die as a consequence. I appeal to the Government to withdraw its amendments and support the measures we are proposing in the motion.
I thank People Before Profit-Solidarity for tabling this motion. This year, workers and families will be facing extraordinarily high energy costs at a time when most can least afford them. There have been over 30 price hike announcements from Irish energy suppliers since the start of the year, with some suppliers raising prices on multiple occasions. This is on top of other spiralling costs that the Government has completely failed to regulate, including rent, childcare, insurance and the basket of shopping; the list goes on. The Government does not seem to recognise the real hardship many people are facing due to these constant price hikes and has failed to bring forward any meaningful solutions for people.
Euro finance ministers met in Luxembourg on Monday to discuss the energy crisis and we heard calls for strong co-ordinated action on this. Some EU member states, such as Spain, France and Italy, are already acting unilaterally and with appropriate urgency. In Ireland, the Government sits on its hands. It is essential emergency action is taken here to protect households from crippling energy price hikes. Whether it is through the consumer Acts or another mechanism, Ministers cannot sit on their hands as people go cold, hungry or potentially die as they struggle to cope with heating bills this winter. These huge price rises are an emergency and need to be treated as such in the budget announcement next week.
There are measure the Government can take. Last year, I published a Bill that would ban utility disconnections during the fuel allowance season. This is an important protection that should be introduced. We cannot have a position where those facing financial difficulty have their gas or electricity cut off in the middle of winter for failure to meet their bills on time. Even having the threat of disconnections hanging over families is incredibly stressful. Yesterday, at a committee meeting, we heard from representatives of the Commission for Regulation of Utilities on this issue. Other European countries, such as the Netherlands, Finland and Belgium, have winter disconnection bans and such a protection should also be introduced here.
The electricity public service obligation, PSO, must be reformed. It should be levied on overall demand, not peak demand as is now the case. Residential consumers are responsible for approximately 42% of peak demand but only 28% of total demand. Industrial consumers, meanwhile, are responsible for 47% of peak demand and 44% of overall demand. Despite contributing less to overall demand than industrial users, residential electricity users' outsized contribution to peak demand means they are apportioned an outsized share of the PSO. We want to change this to ensure large electricity users, such as data centres, pay their fair share of the PSO based on their overall demand for electricity, rather than ordinary households shouldering the heaviest burden.
To add absolute insult to injury for families, the Government still intends to carry on, with complete disregard, with carbon tax hikes, adding to the burden on families, with an extra €1.50 on a fill of motor fuel, an extra €13 on the average gas bill and an extra €20 per tank of home heating oil. What is the Government's argument for this? We have heard the money will be used to offset carbon impact and we need it anyway to invest in climate projects. The real world is a foreign place for this Government. The truth, of course, is that welfare supports go nowhere near covering the impact of these hikes. What about the promised climate action spend? How many houses have been retrofitted in the past year? The number is little or none. How many cold homes have been insulated? How many heat pumps have been installed? It is a fraction of what was committed to and an even smaller fraction of what is needed.
How many new public transport routes have been provided? There has been none, not even one. I have repeatedly seen a response from the National Transport Authority indicating "2021 does not include provision for the introduction of new or improved services in these areas". In my county I can think of communities like Carlanstown, which appears in our local newspaper this week and has no service. Kentstown is a village that had a service years ago, when there was just one housing estate in the place, and now it has no service, despite having a far greater population. Elsewhere, existing services to Dublin City University have been reduced.
All of this is happening while the Government is subsidising millionaires to drive electric supercars and running our energy system to the brink of collapse to facilitate big technology foreign direct investment. It is really a case of one rule for some and another for the rest of us. This Government just does not get it. It is out of touch, out of ideas and with any good luck for the Irish people, it is running out of time fast.
I welcome the opportunity to speak to the motion and commend People Before Profit on bringing it forward this morning. As we all know, energy costs have been increasing consistently in the past number of years and families and households are now facing their highest ever electricity and heating bills in many cases. We have heard much talk in recent weeks about the fuel allowance and any increase in this is of course welcome. However, we must also consider that the fuel allowance is extremely limited.
Many people lost their jobs both before and during the Covid-19 pandemic. There is a 15-month waiting time for access to the fuel allowance for those on jobseeker's allowance. Workers who have paid their taxes and are out sick from work on illness benefit cannot access assistance with their fuel costs. Those on low wages being topped up by the working family payment also cannot access fuel allowance. All of this must be considered on top of the increases that are so desperately needed in the fuel allowance.
In a major study earlier this year, the Society of St. Vincent de Paul indicated that nearly 20% of working people are cutting back on fuel and electricity due to costs. We have people at work who cannot afford their electricity and heating bills. We must see measures such as a discretionary fund to help with the costs of those who are locked outside the fuel allowance. This is a suggestion we brought forward in February, eight months ago, when we wanted this Government to take action with respect to heating and electricity costs.
A report published by the Economic and Social Research Institute, ESRI, published last August concluded that increases in fuel prices for homes through a carbon tax would increase the portion of people experiencing fuel poverty. A Department of Social Protection report from July 2020 concluded that low-income households would be disproportionately affected by carbon tax increases. How can the Government knowingly increase that tax in the knowledge that those at the bottom will suffer? I urge the Government to back this morning's motion.
I welcome the opportunity to speak to the motion and thank People Before Profit for bringing it forward. Families and workers in the midlands and across Laois and Offaly must contend with increased fuel costs and the worry of how to keep the heating and lights on this winter. Our region in particular will be hit hard. Unfortunately, the Government continues to implement proposals that disproportionately hurt lower-income families, rural households and the elderly without providing affordable and accessible alternatives.
It is a key point that we in Sinn Féin have continuously outlined our alternatives, including by publishing legislation that would ban utility disconnections during the fuel allowance season. We have budgeted for an increase in income limits for fuel allowance to ensure more workers, families and pensioners can be provided with support. We also want semi-State companies, such as Bord na Móna, the ESB and Coillte, to be given resources and be allowed to develop renewable energy projects so we are not always at the mercy of multinationals and big corporations.
We have called for the PSO levy to be reformed to ensure it is levied on the larger and most profitable users, including data centres, rather than ordinary households. These are the people who will be hurt most by the carbon tax, thanks to Fianna Fáil, Fine Gael, the Labour Party and the Green Party, all of which backed these major hikes over the next ten years.
The people who will be hurt most this winter are ordinary people such as those in counties Laois and Offaly who, in most cases, have no energy alternatives. Laois-Offaly has a limited amount of public transport, a very low number of retrofitted homes and a population that was and is highly dependent on solid fuel for home heating. I made the point to the Minister of State's party leader at the climate committee three years ago and again two years ago that some of the homes in my constituency will not be retrofitted until 2030, 2035 or 2040. The inhabitants of those houses will be dead from cold long before then and the retrofitting will not matter to them. The Minister of State needs to get that.
When the Government increases carbon tax yet again in a few weeks, there will be further price hikes on briquettes, gas bills, motor fuel and home heating oil, all of which will hit rural households, low-income workers and families. Loading carbon tax on workers and families in the midlands or any other part of the State who have little or no alternative is unfair. They cannot afford the alternatives. The Government will not change behaviour if people do not have alternatives. A bale of briquettes that previously cost €3.40 now costs €6.50. It does not have to be that way.
I say "Well done" to the Minister of State on his policies. Sinn Féin wants there to be a transition. However, horticultural peat moss is being shipped in from Latvia. Shiploads of it are arriving here. How is that taking action on climate change? How is the carbon footprint of importing briquettes from eastern Europe and Germany that are filled with oil and all sorts of other substances while factories are being closed down in the midlands doing anything for the climate? Sinn Féin has set out its policies to tackle this issue. The Government must take it seriously and deal with it in the budget.
People are living in fear. They are worrying whether they will have enough money to heat their homes this winter, enough electricity to turn on the lights and enough money to put fuel in the car. Household energy costs have gone through the roof. It is estimated that energy costs to homes will rise by as much as €800 this year. All these increases in energy prices are separate from the carbon taxes on gas, home heating oil, coal and briquettes. So far this year, 25 separate electricity and gas price rises have been announced by 14 providers. The cost of petrol and diesel has increased by 24.8% since this time last year. This will seriously impact on the elderly, those on a fixed income and the less well-off. What measures will the Government take to offset the impact of soaring energy prices on these people?
Two data centres are already operating in County Meath, while two more have been granted planning permission and another is going through the planning process. These data centres will use the same amount of energy annually as almost 1 million homes.
Ireland has started to import peat from other European countries to meet demand here while stopping people cutting turf for domestic use. A couple of weeks ago, a ship carrying 400,000 tonnes of peat from Latvia in eastern Europe, 3,000 km away, made its way to Drogheda Port. The destination was Rathowen in north County Westmeath. Bringing this peat from Latvia involved enormous effort in terms of cost, manpower and time. How does it affect families? It affects them in their pockets as the cost to produce the peat locally would have been less than a quarter of the price. The bog in Latvia emits carbon just as bogs in Ireland do, in addition to the carbon emitted as a result of the transportation. The bog in Latvia is 100 km from the port in Riga. Some 200 trucks made that 200 km round trip. That is 40,000 km of diesel. Fuel was then needed to transport it 3,000 km to Drogheda and then to Westmeath. In the coming months, more and more shipments of peat will land in Ireland. This is farcical.
Most people concede that we have to make changes in how we live and work in order to reduce our carbon footprint. However, these changes have to be well thought out. Imported peat has a carbon footprint as large as its price tag.
I acknowledge and thank People Before Profit for bringing forward this important motion. Like my colleagues, I am gravely concerned by the impact of the rising cost of energy. Fuel poverty has been talked about for years and, sadly, it is becoming more and more common.
At the end of 2020, Ireland had the fourth highest electricity prices in the EU and the seventh highest gas prices. How many more people will be forced to turn off the heating on cold nights this winter if prices continue to rise? People are choosing between heating their homes, buying food and paying for vital medical treatment, including transport to medical appointments, the cost of which is increasing because of the increasing cost of fuel. In August, the ESRI claimed that a 1% in the price of fuel for home heating would mean an almost 5% increase in the number of people experiencing fuel poverty. Prices for customers are now 40% higher than they were at this time last year and the over-dependency on the Society of St. Vincent de Paul, which is creaking at the seams trying to keep people alive and safe, is not sustainable and cannot continue.
Several of my colleagues have rightly called on the Government to examine the steps being considered by the Spanish Government in respect of taxing companies that benefit from the price of gas going up and redistributing that revenue to consumers in order to ease the burden on them. The Spanish Government moved to cap prices and limit the profits of power companies. That is something we should be considering, but it is important to ask why some companies would benefit from the price of gas increasing. The liberalisation of the electricity market has been a long-standing EU policy championed by successive Governments. As always with market liberalisation, we were told it would bring greater efficiency and drive down prices.
I too thank People Before Profit for bringing forward this important and timely motion. We are facing a winter of discontent, but it must not be a winter of disconnect. Global gas prices have climbed to the highest levels in more than seven years. There are external factors that impact on the wholesale price of gas and electricity in Ireland, but the Government needs to put measures in place to reduce the effects those external factors have on citizens.
Government charges, including carbon tax, make up 16.2% of electricity bills and 17.4% of gas bills. The Government and, in particular, the party of the Minister of State, that is, the Green Party, can dress this unfair tax up any way they wish but it is a brutal and punitive tax that will impact on the people who can afford it least. It applies to all the things people cannot do without - petrol to get them to work, gas to cook their dinner and home heating oil to keep them warm. If one has the money, one can buy an electric car, install a fleet of panels on one's roof and retrofit one's house in order to avoid the tax increases in all these areas, but the ordinary people of Dublin Mid-West do not have additional funds. Increases in house prices, rents, childcare and the general cost of living have pushed people to the pin of their collar.
Sinn Féin has called for a €5 million discretionary fund for those struggling to meet fuel bills this winter as a result of the increase in prices. We need to start putting things in place now to stop people from getting cold this winter. Sinn Féin has published legislation that would ban utility disconnections during the fuel allowance season. That would remove the threat over people's heads of being cut off if they are struggling to pay their bills during winter. A couple of weeks ago, I contributed to the statements on child poverty. Those listening to that debate heard that parents are making stark choices to heat the house or feed the family. That is a choice no family should have to make. This must not be a winter of disconnect.
It beggars belief that in 2021 we, as a society, are failing to fully protect citizens from fuel poverty and hypothermia. That should be the first duty of any republic. There are thousands of older people who survive solely on State pensions. There are thousands of families living on the minimum wage. There are thousands of small businesses that are all facing a bleak winter as a result of the significant rise in energy costs. The Government must act now.
Practical measures are required, such as extending the fuel allowance from 28 weeks to 30 weeks, a moratorium on utility disconnection and the establishment of a €5 million discretionary fund to help households that do not qualify for fuel allowance but will be in extreme difficulty trying to heat their homes and pay energy bills this winter. Constituents in Wexford have told me they must decide whether it is a heat day or an eat day. The ESRI has stated that a carbon tax will have a disproportionate and regressive effect on low-paid workers, old age pensioners and those with long-term medical conditions, adding that a 1% increase in fuel prices will bring fuel poverty up to 12%. The Government must heed these warnings and not increase the carbon tax in the budget.
Rural Ireland faces even more hardship because people in rural communities are more dependent on gas, coal and wood to keep their homes warm. A just transition is not offered, however. Microgeneration schemes would allow farmers in rural communities to generate their own power and possibly sell excess electricity back to the national grid. The evidence is written on the wall. We would do well to take a leaf out of the books of those of our European counterparts that have acted to protect their citizens, particularly Spain in its national strategy against fuel poverty. I ask the Government to act swiftly and responsibly and to do the right thing. I commend People Before Profit on introducing the motion.
I welcome this motion because it provides a timely opportunity to discuss the issue of fuel poverty and the looming energy crisis. The first call we have to make, as Members of the Oireachtas and representatives of the people, will be to again discuss the recently announced lifting of the moratorium on energy disconnections. We need such a measure to ensure that people are not cut off from their utility supply, including electricity, should they find themselves unable to pay their bills over the coming winter period and beyond. I call on the Government to engage with the Commission for Regulation of Utilities on that issue with a view to ensuring that the regulator at least discusses the possibility of putting that moratorium in place again.
A number of years ago, I visited a house in north Cork. I will not say where it was but as I pulled up to the gate there was a woman lifting a bag of timber blocks in through her front door. It was a mid-terrace house and she was lifting the bag in through her front door. Naturally, we would all assist in those circumstances and I did so. She and I got to talking and we were discussing the state of her house and the fact that she was piling wood into a fire to feed a back boiler to heat the house. She had no other means of heating the house and she spent her time clung to her fire. The woman is in the same situation a number of years later.
We have not seen a tangible great leap forward in retrofitting programmes for people who have owned their houses for a long time but do not have the means to reinvest in them because there is a shortfall between the grants available and the true cost of retrofitting. If that cost could be bridged, whether for people living in a local authority house or owner-occupiers, it would greatly assist the likes of that woman. A low-cost loan, such as that proposed by the Government, will not be sufficient for her to bridge the gap. Her savings would be meagre because she is wholly dependent on the Department of Social Protection for her means of income.
There has to be a better way of ensuring that the thousands of people in similar circumstances are given an opportunity to retrofit their houses in a way that provides proper heating and insulation and damp-proofs their homes to prevent the mould on walls that all of us have observed in houses we have visited over the years. This has to be a meaningful objective of the Government. The available evidence would suggest that in the past seven or eight years in particular, we have not had that great leap forward or dealt with the coterie of people I am talking about, of whom the woman I described is a representative. The Minister of State will acknowledge that.
If something were done for that woman, we would not find ourselves arguing in this House about pre-budget submissions that seek increased payments and transfers to people on the basis that they have to meet the costs of continuing to shove wood on the fire to feed the back boiler. All of that would be taken out of the equation. Be that as it may, we are at a juncture where measures will have to be introduced in this budget to offset the cost of the increased price of carbon. Fuel poverty measures must be in evidence in the budget to allow that woman to at least offset the cost of the coal, briquettes and blocks that she is forced to burn to meet her needs. That issue has to be addressing with a short-term measure.
Budget 2022 must introduce a carbon tax credit as an offsetting measure to deal with households that will find themselves in the fuel impoverished category in the coming 12 months and beyond. If the increase in the price of the carbon tax is already priced in following last year's budget, the danger is that people on low incomes will find themselves having to hunt around to meet the costs of heating their homes. If a refundable tax credit were introduced for these people, it would be a meaningful measure that would at least offset the costs of the increased price of carbon and give some level of comfort to those households. I ask the Minister of State to factor that suggestion into his considerations, if the budget has not already been put to bed, and the interplay between line Departments and the Department of Public Expenditure and Reform. At this late hour, some measure that would give working families and fuel impoverished households a refundable carbon tax credit that would offset the increase in the costs of energy and fuel would be welcome.
As a short-term measure, the Labour Party also advocates extending the fuel allowance by four weeks. This measure has also been advocated by representative organisations, particularly those representing people who find themselves wholly reliant on the Department of Social Protection for a payment. If the fuel allowance were extended by four weeks or increased by €5 per week, that would be worth approximately €272 to recipients. That would help the woman I am talking about.
President Higgins used to say of rural electrification that it took the stoop out of the back of the women in Ireland because they were not bent down stoking a fire all their lives to keep the house lit and put food on the table. It seems that things might not have changed for a good number of our citizens, particularly those who are living in the fuel impoverished houses we are talking about. I am not having a go at the Minister of State or the Government. This should be a non-partisan and apolitical issue which we should all be tasked with addressing. Various Oireachtas committees have made recommendations on these issues and their voices, which are representative of the people, have fallen on deaf ears in the Executive. The Government could bring into play some simple measures, including the carbon tax credit, that would help a lot of people.
I thank People Before Profit for tabling this timely and important motion. For some families this matter is critical. In recent weeks, there have been many motions and speeches and much discussion in this Chamber, including on parliamentary questions, on the issue of energy security, management and prices and what the Government is doing to address the crisis we are facing into this winter.
My own party, the Social Democrats, put forward a motion on the data centres and those issues were debated quite robustly at that time. It is quite clear that the Government is sleepwalking - or walking out of the Chamber, as the case may be - as the debate on energy continues and is sleepwalking into a crisis of its own making when it comes to energy and the impact that this will have on families.
Some families in this country will see rises of €800 in their energy over the coming winter and the reality for many families is that they will have to choose between feeding their children, paying the rent, paying childcare or heating their homes. That is just not acceptable in this day and age.
We know that fuel poverty supports will be the key focus in this year’s budget but we have not yet heard the full details around this. I was shocked to see that even in my own constituency of Wicklow, 9,500 households receive fuel allowance at present, which goes to show the extent of the problem and the number and the different types of families who are very vulnerable when it comes to fuel poverty.
Significantly more people will be impacted this winter. People who would normally be able to manage their heating costs will find it very difficult. The Government needs to take a broader look at the fuel allowance and the temporary measures that can be put in place to assist those families because of that. For example, families in receipt of the working family payment cannot access the fuel allowance at present. This is something that needs to be addressed and the Social Democrats are proposing that those families are taken into account for the fuel allowance. Jobseekers also have to wait 15 months before they can claim this support. The Social Democrats believe that this 15-month gap needs to be removed.
We will also be calling for an extension to the eligibility criteria for the fuel allowance and expanding it from the months of November into February to cover the whole winter season. The Government needs to look at ways to assist those families who may not necessarily or traditionally access that fuel allowance. There will be, in particular, many working families who will be hit very badly this winter in this regard.
We also need to ensure that families or individuals are not disconnected this winter. They cannot be forced to feel the brunt of this energy hike to the point where they do not have access to any heating or fuel. It is important that a moratorium is put in place. I requested and spoke to the CRU yesterday. It was open to reviewing it but I ask that the Government engage with the commission on that issue.
There is also the issue of self-disconnection which has happened already. We have seen during the Covid-19 period that this was happening quite a good deal. It is not something that is monitored. There needs to be a mechanism put in place to monitor self-disconnections whereby people themselves just stop using their own energy in order that they are not disconnected formally. It is important that that mechanism is monitored and that arrangements are put in place in order that we have the statistics and the data on it and know the exact extent of the problem that people are facing.
When we are talking about energy crisis, we cannot separate it from the climate crisis and how our solutions and policies will address both. It is very important that when talking about energy that we also talk about just transition because that is a key part of it.
Moving from the current situation to where we reduce our CO2 emissions will require a disruptive transformation of our energy system. It cannot be the case or allowed to happen that those who are least capable of addressing this issue are burdened with doing so. Just transition has to be key component of what the Government does. Unfortunately, I have not seen that to date. There has been a hesitancy within the Government to recognise and incorporate the principles of just transition, whether that was into the Climate Action and Low Carbon Development (Amendment) Act or into policies. When we talk about just transition, the Minister for the Environment, Climate and Communications usually refers to the work that is being done in the midlands. Just transition cannot be specific to one geographical area but needs to cover the entire country. It also needs to be broader than simply referring to the workforce. It needs to be talking about just transition for communities.
In recent weeks, I introduced the Just Transition (Worker and Community Environmental Rights) Bill, which was a Bill that the Minister, Deputy Eamon Ryan, originally introduced a few years ago. It has not been progressed. I hope the Government would support such a Bill, given that it was a member of the Government, namely, the Minister for the Environment, Climate and Communications who originally introduced this Bill earlier and spoke so passionately about the importance of having it in place. If that Bill was passed, workers, communities and areas would have an opportunity to hold the Government to account over decisions and any inaction that they perceive which could lead to situations such as fuel poverty.
In dealing with just transition, we are also talking about who we prioritise when we deal with our energy or climate actions. It is clear if anyone has been listening to the debate on data centres over the past number of weeks that the Government is prioritising corporations above the needs of communities when it comes to data centres. A pause on the development of data centres was a very moderate evidence-based solution that could have enabled the Government to bring in the measures that would assist and ensure that data centres do not completely override the needs of communities, as we have seen to date. The Social Democrats called for a moratorium on that development and, unfortunately, that was not accepted by the Government. That indicates where the Government’s priority is. Communities and individuals will be expected to go to great expense in their own right in order to move to electric vehicles and to retrofit their homes. These are not cheap things to do and even if one receives subsidies and grants these are still expensive measures and yet the Government is not requiring the same effort from the large corporations in respect of data centres. There are questions as to how much these centres contribute to our society and economy. That is something that also needs to be addressed.
I want to recognise the work of the Solidarity-People Before Profit Party have put into this motion today and I hope that it forms part of the discussion that the Government will be taking into the budget negotiations in order to fight hard for individuals who will find it difficult over the coming months to deal with the energy crisis.
I thank People Before Profit-Solidarity for preparing this very important motion this morning. It is very timely and topical in light of the budget next week.
I will focus my contribution on the concept of energy security at a macro, national level but also and, perhaps most importantly, at a micro, household, individual level. We can all appreciate that there is a very significant energy crunch at the moment. This is happening for two reasons, primarily.
First, the world economy is just cranking up again after having been asleep for the past 12 months, which is placing very significant demands on the limited supply that is there. Second, and perhaps most importantly, there are many geopolitical games being played out at the moment where strategic rivals and competitors are turning down gas valves and trying to apply great pressure on their competitors. Unfortunately, this has also landed Ireland in the cross hairs. One point that is rarely mentioned is that energy price inflation also usually leads very quickly to general inflation. The most vulnerable people in the country will soon be hit by a double whammy with both energy inflation and the inflation of staple food prices etc., which also are going to rise. This will also have a significant effect.
Ireland is uniquely vulnerable here, primarily due to our geographical location, in that we are at the very end of a very long pipeline from eastern Europe. Most people also accept that our housing stock is very poorly insulated and this is an area which we certainly have to work on. Public transport is poorly developed and we have an over-reliance on fossil fuels. Consequently, simultaneously or even perhaps paradoxically, while we have an over-reliance on fossil fuels we also have an under-accessibility issue from a fossil fuels point of view, which is a kind of perfect storm from an energy perspective.
We have also closed down a number of power plants in the past 12 months and I would argue this perhaps was done prematurely. Plan B was not in place before plan A was shut down.
I am absolutely in favour of the just transition but it has to be done in a very measured and focused way that is possible to implement. The last point I would like to make is that, while some elements of the energy crunch are beyond our control, some elements are within it. We should be focusing on the latter. With regard to the budget next week, I agree with Deputy Sherlock on the concept of tax credits. That is a good way to go. There should be some measures in the budget to offset the rise in energy prices. If that is not possible, we should suspend the planned increase in the carbon tax, at least until winter has passed. I was happy to see greater investment in public transport in the national development plan on Monday. There is also to be more funding for the Sustainable Energy Authority of Ireland to facilitate and encourage people to retrofit their homes. You can retrofit your home in a couple of weeks. If we get ahead of this now, it will have a positive impact even this winter.
The last thing we can look at is the microgeneration of power. While I know the Green Party has been mentioning this in recent years, we really need to look at the democratisation of energy. That is a good way to go. Every south-facing roof in Ireland should have solar panels either for heat or for electricity. Deputy Martin Kenny and I speak a lot to members of the agricultural community and there is a lot of spare roof space on sheds and farm buildings. It is a good way to go. However, while you can pass surplus power to the grid, you cannot be properly paid for it yet. That is an issue. It is also unusual that you can put solar panels on your house without planning permission very easily while schools, public buildings, swimming pools and sports centres need planning permission. I would be grateful if the Minister of State could look at the bureaucracy associated with that and make it easier to put up solar panels.
I compliment People Before Profit-Solidarity on tabling this very important motion at this time. The increase in the cost of fuel impacts on everybody, including businesses, consumers and especially those in fuel poverty. When we talk about this and about what is going wrong, we sometimes put the cart before the horse. We closed down two power generation stations without having an alternative in place. Likewise, we are talking about offshore wind energy and reaping the benefits of all of this green energy but we do not have a snowball's chance of having anything in place within the next ten years. At the same time, we are encouraging people to put in air-to-water or other all-electric heating systems for their houses. The cost of heating these houses is now rising after people invested in what they thought were green measures. A lot of the time, we have knee-jerk reactions to climate action without considering that, when we take out a process, we need another in place to take over. We can see where ceasing production of peat moss for horticulture has led us. Thousands of tonnes of stuff are now being imported every week when we have the very same stuff here but have stopped producing it. Something has gone wrong there. Putting the cart before the horse does not work.
We have also brought in this carbon tax and applied it to everybody. People are talking about a just transition. There is no just transition for people living in Ireland who have to pay more to put fuel in their cars while also paying more for electricity. They have to pay more all of the time. There is very little public transport. The national development plan talks about dealing with all of this over the next ten years. We are moving ourselves towards a perfect storm by not looking logically at what we need to do to get the just transition right while also getting climate action right. We cannot have climate action without understanding the consequences that action will have for people. If we change energy sources, we have to make sure we do not cut off a source we have until the new one is up and running and delivering.
The issue of planning permission for solar panels was highlighted by Deputy Berry. This is a farce. We have an enormous number of community buildings, schools and facilities like these that could be used to generate electricity but planning permission must be sought, which can cost thousands of euro, so it is not done. That is what is wrong. Many people have gone into microgeneration and are feeding energy back into the grid but are not getting paid for it. They understood that they were to get paid for it from 1 July but are still none the wiser as to when they will be paid, having invested good money for the sake of climate action and doing things right. It seems that, when someone does something right, the rug is pulled out from under him or her. People are now telling others who are inquiring not to go there.
Next Tuesday is budget day. Immediate action must be taken. There must be an increase in the fuel allowance payable to all people in fuel poverty. The range of payments that qualify for fuel allowance must be expanded. That needs to be looked at, as must be the eligibility threshold for those seeking the allowance. If that is not our immediate response, we are only paying lip service to the issues facing us, as usual.
I thank People Before Profit-Solidarity for bringing this very important motion before the Dáil. Fine Gael and Fianna Fáil did a deal with the Green Party to gain power and privileges at any cost and this has meant a lot of financial hardship and pain for Irish families. The public's interest was never at the heart of the deal done to form this Government. It was all about power and self-interest. One example of this financial hardship and pain is the soaring bills for electricity and gas which households have to endure. The front page of a recent edition of the Irish Examineroutlined the differences. The cost of filling a car with diesel one year ago was €63; it is now €94. The cost of filling an oil tank a year ago was €450; today it is €761. The Government would like to say that this is due to factors beyond its control. That is not true. We have a policy of dependence on renewable energy for our energy supply while not having the renewable sources in place or a plan to put them in place. We have a new policy to close down any prospect of new offshore oil and gas exploration, which could provide a competing source of energy. The Government imposes carbon taxes on all energy and heating products and these are to increase in each year's budget until 2030. The Government imposes VAT charges and also imposed a public service obligation, PSO, levy which applies to every household bill. This collects approximately €400 million annually. These funds are given directly to large multinational firms to subsidise the building of wind turbines. This charge on every household has increased by 123% since Deputy Micheál Martin became Taoiseach. This Government is doing nothing for struggling families. The cost of electricity is going up, as is everything else. What the Government is doing makes no sense. It is forgetting the people because it has, quite simply, lost touch with them.
The cost of filling a car in January 2021 was €78. I filled my own. The cost to fill the same car today is €91. The Government is now to also increase the carbon tax, which will increase this cost by €1.48, increasing the cost to fill that car to €92.48. Over 12 months, assuming that 60 l of fuel are used per week, the extra cost to run a car will be €780 per car owner. One must also consider SMEs, hauliers and farmers. Who benefits from this? City projects. Who pays the most? Those in towns, villages and rural areas and small businesses. We pay the most and we get no return. Filling a 1,000 l oil tank at 50 cent per litre cost €500. This oil now costs 85 cent per litre. I have just got those costs this minute. Filling that tank will now cost €850, representing an increase of €350. The average family burns 4,000 l a year resulting in an increase of €1,400. Who pays the most? People in towns, villages and rural areas. It is an absolute joke. We have the highest costs but get the least investment. We have no public infrastructure. We have no sewerage or water infrastructure. The Government does not even fix the roads.
The Government gives such a small amount of funding to the local authorities they can do only the barest of repairs and no new roads are being constructed. Rural Ireland is paying the most. Some members of the Government were elected by the people of the towns and villages in rural areas. Approximately 37% of the population of Ireland live in towns, villages and rural areas. Government members need to remember that for the next time they go knocking on the doors.
As stated by Deputies Michael Healy-Rae and O'Donoghue, the cost of filling a car with fuel has risen from, roughly, €70 to €90. Last year, a full tank of home heating oil cost €450; it is now €761. Electricity costs are rocketing through the roof, with no understanding of the effects on this on people. This is the cost of the Fine Gael and Fianna Fáil deal with the Green Party. Their nod-and-wink deal with the Green Party to get them across the line and into their nice, polished positions is costing the good living people of rural Ireland. Some 37% of the people of rural Ireland are carrying the rest of the country on their backs. By God, it is a painful carry.
As I said in this Chamber last week, last year the cost of a litre of fuel was €1.10. It is now €1.48 or €1.49. The Government should ask motorists if they are happy about that and if the increase was worth it in order that three super scooter buses could be purchased for the Minister, Deputy Ryan, at a cost of €2.4 million. This is an outrage. Last week, Deputy Bruton said in this House that farmers will have to take the cuts to save other sectors. Is that the Fine Gael way? The roots of Fine Gael must be absolutely crumbling in regard to the comments of the former Minister, Deputy Bruton, which seek only to destroy the very people he should be supporting. Why should the farmers and the people of rural Ireland take the hit to save other sectors or the rest of the country? We cannot continue to do this. Public transport in rural Ireland is on its knees. In most places, there has been no movement on transport in 30 or 40 years. For those in rural Ireland who do not own a vehicle thumbing a lift is the best option. Most people are not a position to run a vehicle. The Government has let down the people in a shocking way. Energy costs are out of control. The retrofit of homes and the energy schemes are at a standstill, with a more than two-year wait for most people. It is an outrageous set-up.
I am glad to have an opportunity to speak on this very serious problem. Indeed, it is a problem for the people of Kerry because, as we all know, their journeys to work are longer. Much of Kerry is farming community. The cost of diesel for tractors has more than doubled and the cost of heating oil has more doubled. I am concerned that elderly people could be cold in their homes this winter. We will have to return to turf cutting. Before this winter is out, people will be glad of a load of turf. Electricity costs have risen by 19%. Everyone is being advised to move to electric, including electric vehicles, yet there is no place to charge them. It appears now we will not have sufficient electricity to bring to the plugs.
Transport costs affect every sector in the country, be that in regard to the transport of timber, slates and so on. We are told new-build houses will not have chimneys and that they should all have electric heat pumps. When there is no electricity, how will people heat their homes? Insulation costs have risen by 40%. The Government has a plan to retrofit houses but there is a wait of between a year and a half and two years in that regard. Why is that?
I want to also raise the serious issue of eligibility for the fuel allowance for many other categories of people in receipt of social welfare benefits. It is stipulated that to be eligible for the fuel allowance a person must be unemployed for 15 months. God almighty, that rule is not fit for purpose. Those people will get cold just like everyone else. The construction of houses without chimneys is a recipe for disaster. This is already happening in Kerry. What will keep people warm when the electricity runs out? The Government regularly speaks about offshore energy. It knows well that there will be no wind turbines out in the ocean for at least ten years. It needs to stop talking about that and to stop being ridiculous about things.
I thank People Before Profit-Solidarity for tabling this very detailed motion. It is a reasonable and rational motion. Deputy Barry's call for the democratisation of energy caught my attention. It is a wonderful concept. I do not see any sign of it on the part of Government. That would be great. I note the Minister is nodding. It would be the beginning of the solution to our problems.
Statistics catch my eye, in particular the one set out by People Before Profit-Solidarity in relation to the Society of St. Vincent de Paul research of March 2021 that 19% of people cut back on heating and electricity due to cost, including 42% of those with an illness or disability and 36% of lone-parent families. In addition to that, I come from a city where there is a major housing crisis. In Galway, rents increased by 14.2% in the 12 months to quarter 2 of 2021. In the same city, the Simon Communities of Ireland regularly produces reports entitled, Locked Out of the Market, to make it easy for us politicians to understand. One is locked out of the market if one cannot get a house within the HAP guidelines. In Galway, there are no such properties available. According to the ESRI, one in six households were already in energy poverty in 2019, which is pre-pandemic. This means people have to tackle rising rental costs as well as rising energy costs.
The EirGrid generation capacity statement sets out demand uncertainty under a number of bullet points, including that demand is driven by economic activity, assumptions on energy efficiency and the growth of large energy users and data centres. I say that by way of response to some of the comments about us being off the deep end or, should I say, off the grid, when we talk about how demanding data centres are. The statement further sets out key observations in regard to Ireland and states that long-term system electricity demand in Ireland is increasing and is forecast to increase significantly due to the expected - not unexpected - expansion of many large energy users, in particular data centres. I would welcome a proper discussion on data centres. We have to have them in our economy and the silly argument that we are all against them is ridiculous. We have to start to ask questions when we have 70 functioning data centres here and, I think, 30 more in the pipeline, which will use 25% plus of our energy in 2030.
I will return to the specific motion in the minute I have remaining. This is a very basic motion, in my opinion. It seeks an increase in the fuel allowance, it calls on the Government to act under existing legislation in regard to capping prices and stopping increases and it points to other countries that have successfully done this, not being known for their socialism. Why is this important? It is important because the market system has not worked. I am tired of Members on this side of the House being accused of ideology. The ideology of every successive Government, in particular Fianna Fáil in government with the former Progressive Democrats, Fine Gael and now the Green Party, is that markets will provide and we will help them. That has not helped the housing situation. We are providing over €1 billion in HAP and other subsidies and all that is doing is making the housing crisis worse and raising prices. The exact same model here will help with the fuel allowance. It will increase it a little in the budget but it will do so without facing what is the important point. The important thing is that we as a people should have control of our energy supply. That is what we need.
I welcome this People Before Profit-Solidarity Private Members' motion on the very important issue of energy prices. The figures set out in the motion speak for themselves. Without action on the part of the Government, many people face a very difficult winter in just keeping their lights on and staying warm. Some 400,000 households in this State experience fuel poverty. It is estimated that 10% of income goes on heating. Ireland, North and South, has the highest excess winter mortality rates at 2,800 cold-related deaths. Most at risk are those on low incomes, the unemployed, single people living alone, lone parents, pensioners and that cohort includes a large number of children.
This is partly an international problem. There is a shortage of natural gas. We had a lack of wind in the summer. We had a harsh winter last year and a cold snap in April. There has been a reduction in production internationally. Russia is applying pressure to open the new pipeline into the EU, which is a matter for another debate. Russia is looking for that project to be ratified and for the pipeline to be opened soon. We are still dependent on gas because 50% of our power plants are gas-fired.
The figures are astounding. Electric Ireland has announced another increase over the past three months. Energia has increased its prices three times in the past year. Pinergy and Panda Power have increased their prices four times and, according to Bonkers.ie, the increases introduced by some companies will lead to people's annual bills rising by up to €800. That is a lot of money, approximately €15 a week out of people's income. There is a considerable differential in price. Instead of asking people to shop around and switch suppliers, the Government should do a number of things. I agree with the motion that the Government should introduce a price cap. It should introduce that cap in general but particularly for the winter.
The deregulation of our energy companies has caused a major problem. I welcome the comments made by the Minister of State, Deputy Ossian Smyth. We should fully renationalise the ESB, which should be a not-for-profit State company. We should retrofit 160,000 public houses. I know a young woman who has been waiting for two years for the council to retrofit her home, which is in desperate need of it. We need to build 100,000 eco-friendly public houses on public land over the next period of time.
The Government is trying to downplay the role that data centres are having on our energy supply. If up to 23%, and possibly more, of our energy will be used by data centres by 2030, that 23% is taken off the national grid and 23% less electricity going into people's homes. The Government must either increase the energy available to compensate for that loss or impose a moratorium on data centres until we delve deeply into what the issues are and how they are impacting on our energy supply. We could have people paying huge price increases on their energy and, at the same time, getting their electricity cut off during the winter.
I am supportive of the point that the fuel allowance should be increased, as per the motion, up to €15 a week. I also support the increase of the means test for eligibility for the fuel allowance from €100 a week above the State contributory pension to €200 a week above the State contributory pension. I also support extended cover. Those on the jobseeker's allowance, illness benefit and disability allowances do not get the fuel allowance. Only 380,000 households get the fuel allowance. Many people in poverty are not getting the benefit and support of the Government fuel allowance. That should be implemented immediately.
I welcome the debate and the discussion. It is important. This is a topical issue for everybody and it affects the lives of most of the people we represent. I thank colleagues on all sides for their contributions.
I give apologies for the absence of the Minister, Deputy Eamon Ryan, who would have liked to have been a part of this debate. He is in Luxembourg at a meeting of the Environment Council until tonight or tomorrow and was, therefore, unable to make it. He would like to have been a part of the debate. I will certainly give his views and comments during my speech. The Minister of State, Deputy Naughton, was also unable to attend the debate because she is caught up in a justice matter. We heard from the Minister of State, Deputy Ossian Smyth, earlier, who apologised because he had to leave. Most Members will appreciate that most others have not remained here for two hours so I think comments to the effect that the Minister of State left in the middle of the debate are wrong and unfair. We all know that everybody here is doing different things and trying to be in different places at the same time. I appreciate that the proposers of the motion have remained throughout the debate, and rightly so, because this is a matter they put down for discussion. The chairperson was not here when it happened, but I take issue with comments that were made. I will discuss it with the Deputy concerned. That is not the way we try to business in the House.
The Government accepts that households are currently facing volatility in energy prices due, in particular, to a spike in international gas prices. We know that over the coming winter people will be faced with higher energy bills as suppliers and energy companies seek to recoup their energy outlays. Current market expectations on energy commodities, particularly gas, indicate that wholesale gas prices will remain high during the winter months but we hope prices will fall from April 2022 onwards. Beyond the winter season, EU forward contracts anticipate a correction of current wholesale gas prices. This is welcome news that will, hopefully, reduce the prices and bring them back to a reasonable level.
We cannot be complacent. Markets are volatile and the optimum policy is to move away from fossil fuel dependency and the vagaries of international commodity markets. That is what the Government is doing and has committed to doing, a commitment that was repeated in the national development plan that was launched on Monday.
I will turn to Government policy in this area. Electricity and gas markets are commercial, liberalised and competitive, in line with EU policy, and result in greater choice for consumers and businesses in terms of suppliers, products and prices. The position of successive Government for almost 20 years has been that competitive energy markets result in greater choice for consumers and businesses in terms of suppliers, products and prices, and support competition to drive down prices.
The utilities sector is complex. Setting a maximum price for a product, as was suggested, by virtue of an emergency order would raise a number of significant issues, including alignment with the EU energy regulation acquisand other legal aspects, and is not a panacea to the current market conditions. Suffice to say that in the UK, where the price cap was recently revised upwards, it has not guaranteed that customers get the best deal otherwise available in the market. I know other examples were provided but the UK is our closest neighbour and we might as well share all the data we have for different countries. Unfortunately, this has led to a number of suppliers exiting the market in the UK in a somewhat disorderly manner in recent months and that has given rise to significant disruption for customers. We must bear in mind what is happening across the world. I accept there are pluses and minuses and that other countries have a different story to tell.
Within this overall competitive framework, the best long-term policy is, in our view, to support households with their energy costs through energy efficiency measures, with the Government providing a total retrofit budget in excess of €280 million for this year. There are long-term commitments in the national plan, setting out where we hope to go in the years ahead. We will continue with the development of renewable electricity to enable Ireland to reach EU renewable energy targets and our own national energy and climate target of delivering at least 70%, and up to 80%, of renewable electricity by 2030. We will continue with measures such as the EU trading emissions scheme and carbon tax as providing incentives to switch to cheaper renewables and lower carbon energy sources. These measures provide essential economic signals to support the energy transition away from fossil fuels. Carbon pricing is an essential element of any credible plan to decarbonise the economy while supporting those most directly affected by allocating the revenues received to fund targeted social welfare recipients, home retrofits and sustainable farming methodologies. We will also continue to promote further electricity interconnection both to the EU and UK, and to further integrate Ireland with the EU internal energy market.
In pursuing these objectives, our collective efforts to decarbonise electricity generation have led, for example, to over 143,000 homes receiving free upgrades under the better energy warmer homes scheme. In the first six months of 2021, the average value of the energy efficiency measures provided per household was approximately 17,100. Strong growth in wind power, which has led to a major impact on energy production costs, is key to achieving our greenhouse gas emission reductions. Further electricity interconnection to both the UK and France is under way and planned.
I will outline the regulatory regime in which we operate. Operating within an overall EU framework, the independent regulator, the CRU has a wide range of economic and customer protection functions. It monitors energy retail markets to ensure that competition continues to develop for the benefit of the consumer. The CRU also oversees non-price aspects of competition and has taken, and continues to take, steps to increase transparency, customer protection and customer engagement in retail markets. I will also note that under the voluntary industry energy engage code, suppliers will not disconnect a customer who is engaging with them. That point was raised by a number of Deputies and I want to clarify that is the situation. It is important to engage and not to avoid that phone call or communication.
Suppliers must provide every opportunity to customers to avoid disconnection and must identify customers at risk of disconnection and encourage them to talk to the suppliers as early as possible. Suppliers are also obliged to offer a range of payment options, such as a debt repayment plan, for a customer in arrears. In fairness, most of the suppliers honoured that, certainly during the pandemic and other difficult situations in this country. We expect a similar approach in the difficult months ahead when we know energy prices will be affected.
I would also like, in particular, to mention the regulator's role in promoting switching and smart metering, both of which offer immediate benefits to consumers. CRU has certified three price comparison websites, namely, bonkers.ie, switcher.ie, and powertoswitch.ie, to assist consumers to switch. Even if they do not switch, customers should engage with their supplier to avail of the best offer available. Switching supplier could save a customer consuming the average amount of energy up to €281.60 on an annual electricity bill.
It could also result in a €553.69 increase on a combined annual electricity and gas bill and €279.09 on an average annual gas bill. They are comparisons made on 5 October 2021 using some of these websites. Based on the CRU data, active customers who switch suppliers or renegotiate with their current suppliers every year for the past four years could have saved €704 on gas, €1,078 on electricity and €1,696 on their dual fuel costs. A recent CRU survey found that more than half of electricity and gas consumers will switch supplier at least once. People are taking that advice and are switching. We all know it can be head-wrecking to try to make some of these phone calls We need to work with the regulator to make sure that process is streamlined because it can be very frustrating. It is important to recognise that it is worth it in the end.
My message is clear. Customers should avail of switching to get the best deal in the market. For those who are struggling with energy bills and are in receipt of support for their bills, this is even more important. That is because switching supplier or to a lower-cost product with an existing supplier makes supports go further in meeting their costs. The programme for Government contains a commitment in the context of ensuring that the energy efficiency and potential of smart meters is realised and that all mechanical electricity meters will be replaced by 2024. Work in that regard is well under way. The smart meter upgrade, led by the CRU, is a meter replacement programme to move to modern smart-ready technology. New generation electricity meters are being rolled out across Europe and internationally. When the programme in Ireland is completed in 2024, all domestic and business premises will have new modern meters installed.
I will now outline the Government's commitment to helping households with their energy costs, in particular low income households and those in danger of energy poverty, in the months ahead. I have already provided the details of various welfare allowances, including the fuel allowance, the living alone allowance and the household benefits package. The fuel allowance is a payment of €28 per week for 28 weeks. The budget for this for the upcoming season is €292 million. That money is for an estimated 370,000 households. The household benefits package includes allowances towards covering electricity or gas costs. Recipients, the majority of whom are pensioners, are paid €35 per month. The Department of Social Protection will spend approximately €195 million this year on the household benefits package for more than 470,000 customers. The living alone allowance, which is targeted at the recipients of certain social welfare payments who live alone and who often have significantly higher heating costs, is paid at a rate of €19 per week in addition to primary social welfare payments such as the State pension.
Targeted supports provided under the supplementary welfare allowance scheme, exceptional needs payments and urgent needs payments may be made to help meet essential once-off costs which an applicant is unable to meet out of his or her resources. In addition, under the supplementary welfare allowance scheme a special heating supplement may be paid to assist people with special heating needs. It is important that they come forward and engage with community welfare office and social protection offices. Assistance is there once people come forward in time, explain their situation and produce the evidence. As the Minister, Deputy Humphreys, said, these schemes are constantly under review and she is constantly trying to improve them. In launching the winter fuel allowance on 26 September, the Minister noted that heating costs are a concern for many, and that households have seen their bills increase and this would be an important factor as budget 2022 negotiations continue in the days ahead and are completed by next Tuesday.
Finally, I reiterate that there are supports in place to assist with household energy costs. We understand that it is extremely difficult and people are very concerned, which is why I accept the importance of having this debate. Our regulatory framework underpins a competitive market in which consumers can make considerable savings. As was said earlier, we need to make that easier and work with our consumers. That framework also provides protections to consumers via the energy regulator, the CRU. The Government, as set out an amendment, will provide additional social welfare support in the budget to protect the most vulnerable against fuel price increases.
I welcome the debate and thank Deputies for their contributions. I also thank the proposers of the motion.
Many people will be very alarmed by the news this week regarding substantial energy price increases of between €500 and €800. Coupled with that is the news about data centres using enormous amounts of electricity. The Minister of State can, therefore, understand that there is a sense of trepidation. Energy prices worldwide are rising for a variety of reasons. One reason is geopolitical. Other reasons include deregulation and competition. Competition was meant to bring lower prices to the market, but it has done the opposite. Part of the motion refers to the fact that fuel poverty kills between 1,500 and 2,000 people per year, which is an incredible statistic. People want to heat their homes.
One aspect of the debate I want to zoom in on is the retrofitting of social homes in Ireland. There are 160,000 social homes in Ireland. Through the Government's programme, just 2,500 will be retrofitted. That is welcome, but the programme needs to go much further.
These are the facts. Many people will spend huge amounts of money on fuel because their houses are not energy efficient. Those are the facts, regardless of whether the Minister of State wants to dispute them.
Another deciding factor is the deregulation of the energy market in Ireland. The ESB is an incredible company. It was a public utility but, in 2014, the Government, which is possessed by privatisation, deregulated the market. We now have a situation where prices have increased and the consequences of that can be seen. Coupled with that are carbon taxes, which have compounded the issues relating to energy efficiency. That is leading to serious difficulties.
If the price increase comes, which it will, most people will ask what policies the Government will introduce to try to mitigate that in terms of fuel poverty. Given that people die from hypothermia or fuel poverty, surely that is a very serious matter for the Government. If the Government in situcannot address that, then that is a shame on it.
I thank everybody who contributed to the debate. I thank some of the Opposition groupings that said they would support the motion.
I want to respond to a variety of the arguments used by the Government. I will start with what was the elephant in the room in the context of the speeches of the two Ministers of State who spoke, namely, the question of data centres. They spoke about energy usage and price rises. They correctly spoke about the predominant international factors in respect of those, but they did not make a single mention of the role of data centres. This industry is now consuming 11% of our electricity. It will consume perhaps 30% of our electricity by 2030. Moody's predicted at the end of 2018, and again in 2019, that if we continue on this road, which we have done, energy prices would rise as a consequence.
We have an incredible situation whereby the Government is repeatedly unable to give a commitment to people in a developed economy that there will not be blackouts. It cannot give that commitment. It is pointing in the opposite direction of its own commitments in terms of climate. It is attempting to go down an upward escalator by increasing our energy usage dramatically through the expansion of data centres while at the same time trying to move to renewable energy. What is the response of the Government to all of this? It is to say that there is no way it can touch data centres. Not just that, it is to double down on data centre development. It will proceed with the idea of designating them as strategic infrastructure, which means they can bypass the regular planning process. All of that will be disastrous for the environment and households.
It is not too late. The vote on our Bill to ban data centres will take place later today. It is the Green Party which holds the balance of power on this issue. If it had voted with the Social Democrats and the Opposition on the Social Democrats' motion on a moratorium, the motion would have passed. If the Green Party votes with us to ban the development of future data centres, that measure will pass later today. Does the Green Party, which is in government with Fianna Fáil and Fine Gael, put the interests of the big tech corporations first or does it put the interests of ordinary people, which coincide with those of the environment, first?
Unfortunately, everybody knows what the answer is going to be.
To get to the meat of the Government's argument, it is summed up in a particular paragraph from the speech of the Minister of State, Deputy Ossian Smyth, who stated:
It is important to recognise that these price increases are not Government or even regulatory decisions. This is because price regulation ended many years ago. Suppliers compete with each other on prices and set their own prices accordingly, as you would expect [in a competitive, commercial, liberalised market].
That is the point. The Government hails the private market and the Minister of State indicated that the Government's position is that a liberalised market will bring down prices. The truth is that this has not happened. The truth is that the opposite has happened. The evidence for that is international. Despite this, the Government, including the Green Party, looks at the private market and the fact that it is delivering unaffordable price increases for ordinary people and says there is nothing it can do. The Minister of State, Deputy English, was reduced to encouraging people to go consumer price comparison websites and telling them how much they can save. The Government, which has the legal power to regulate prices and put in place a maximum price at the stroke of a ministerial pen, is reduced to advertising a few consumer switching websites. That is what the Government is now reduced to in its hailing of the market and its bowing before everything the market does, regardless of the consequences.
I double down on the point that the evidence is clear prioritisation is a disaster for the environment, the prices people pay and for workers. I refer to the Australian experience because I did not get a chance to do so earlier. Professor John Quiggin examined 20 years of pro-privatisation reform in his report Electricity Privatisation in Australia: A Record of Failure. He was able to compare very similar states across Australia with privatised and non-privatised networks. Price rises were highest in states with privatised electricity networks. Customers' dissatisfaction jumped, with complaints to the energy ombudsman in privatised states leaping from 500 per annum to over 50,000. "... Resources [were] ... diverted away from operational functions to management and marketing ..." While reliability declined, promised increases to investment efficiency have not occurred and real labour productivity has reduced. I could go on. It is exactly the same story here. The big profits generated have not been reinvested in a shift to renewable energy. Instead, those companies are prepared to hike up the prices and make ordinary people pay at this point.
I will conclude by going back to the basic point. People will die this winter if the Government does not take action to shield them from the impact of energy price rises. That is a fact. The Government, in its countermotion, is proposing to take no action whatsoever. That is its choice. There are many available options available to the Government to do something about this, that is, to shield people from the impact of energy prices rises so people do not have to make the choice between heating their house and food. The first action is very simple, namely, the introduction of maximum price caps. Government has the power to do it. It could do it right now and give immediate relief. The second action would be to not increase the carbon tax. At the very least, the Government should not heap the extra price rises it is imposing onto energy in the next budget. The third action would be to increase the fuel allowance by the amount the extra energy is going to cost for people, and extend it so people are able to access it. Last of all, the Government could move away from this disastrous model of privatisation. If we want to have a just, rapid, transition to a zero-carbon economy, we need public ownership and democratic planning in our energy sector.