Dáil debates

Tuesday, 20 September 2022

Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions

Energy Prices

8:10 pm

Photo of Darren O'RourkeDarren O'Rourke (Meath East, Sinn Fein)
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54. To ask the Minister for Communications, Climate Action and Environment his plans to reduce the price of electricity and energy for households and businesses over the coming months; if he has examined introducing a price cap on electricity in Ireland or introducing other market reforms or interventions; and if he will make a statement on the matter. [45782/22]

Photo of Darren O'RourkeDarren O'Rourke (Meath East, Sinn Fein)
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I ask the Minister his plans to reduce the price of electricity and energy for households and businesses over the coming months, if he has examined introducing a price cap on electricity in Ireland or introducing other market reforms or interventions, given the market is broken, and if he will make a statement on the matter.

Photo of Eamon RyanEamon Ryan (Dublin Bay South, Green Party)
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The unprecedented increase and volatility in international wholesale gas market prices has continued as a result of the Russian invasion of Ukraine. This, in turn, has led to increases in energy bills, given the link between the wholesale price of gas and electricity prices. The Government has already put a €24 billion package of measures in place and further measures are being considered for budget 2023. Under the electricity costs emergency benefit scheme, we made a payment of €176.22 to almost 2.2 million domestic electricity accounts. The scheme was part of a package of measures which included further increases in the fuel allowance, seeing it increase from €735 in 2020 to €1,139, and a reduction in VAT on electricity bills from 13.5% to 9%. Under responses 6 and 7 of the national energy security framework, the Commission for Regulation of Utilities, CRU, announced enhanced consumer protection measures to be implemented by electricity and gas providers ahead of the coming winter.

Earlier this year, the Government increased the grant rates significantly to make it easier and more affordable for homeowners to undertake home energy upgrades. In particular, the Sustainable Energy Authority of Ireland, SEAI, is being supported to focus on free energy upgrades for those at greatest risk of energy poverty. As we debated earlier, these schemes are seeing significant demand increases. Business supports are also available to support businesses to improve energy efficiency.

Responsibility for the regulation of the retail electricity and gas markets is statutorily a matter for CRU. It ceased price setting for electricity and gas in 2011 and 2014, respectively. The setting of prices is a commercial, competitive matter for individual supply companies.

Any major interference or change in the market must be carefully considered and that is what is being done now by the EU. We are very supportive of that and we are working with the EU on it. We are also very supportive of the emergency measures considered at the European Energy Council on 9 September, including a change in the market in order that we get a return from the inframarginal pricing and a solidarity levy from fossil fuel producers. Those measures are the most important and immediate ways in which we can protect the Irish people.

8:20 pm

Photo of Darren O'RourkeDarren O'Rourke (Meath East, Sinn Fein)
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It is quite incredible that we have a situation whereby the Minister acknowledges the measures to which he referred are needed at this point in time but, in effect, he and the Government have been a barrier to those types of progressive reforms at a European level. Whatever the situation was in October 2021, I think it was clear at that stage, given the European toolbox had been published a number of weeks earlier, that reforms were needed. As recently as June this year, the Minister confirmed to my colleague, Deputy Conway-Walsh, that he did not support market reforms. The Iberian countries of Portugal and Spain moved for the decoupling and a form of windfall tax on non-gas forms of electricity. Why has the Government resisted those changes for so long and does the Minister acknowledge it was a mistake to do so?

Photo of Eamon RyanEamon Ryan (Dublin Bay South, Green Party)
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No, I do not. The reason we are following the measures we are is that I think the alternative presented by Sinn Féin would be less progressive. Its proposal for a cap on electricity prices seems to be very similar to what the Tory Party in the UK is proposing. It would give a direct benefit to the energy companies, which I do not think is what we need to do at this time.

Photo of Darren O'RourkeDarren O'Rourke (Meath East, Sinn Fein)
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What has the Minister been doing for the past year?

Photo of Eamon RyanEamon Ryan (Dublin Bay South, Green Party)
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As I understand the proposal by the Deputy's party, it would benefit the wealthiest households that use the most energy. Putting a cap in would enable those households to keep consuming energy in a way that would benefit them more than it would poorer households. I do not believe the alternative proposals being presented would give a better outcome. They are full of potential for eventual, knock-on consequences that would be deeply damaging to the State. We can agree or disagree on that but it is my assessment of the alternative proposals by the Deputy's party. I prefer the measures proposed by the European Commission, which we can more immediately apply, and the ones proposed by the Government.

Photo of Darren O'RourkeDarren O'Rourke (Meath East, Sinn Fein)
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The Minister is right. If I were him, I would not answer the question I was asked. I would not talk about how I and my Government stood in the way of progressive measures and proposals at a European level to address the fact gas is driving prices and this is, in essence, playing into the hands of Putin. Gas is driving the price of electricity. The Government and the Minister have resisted these progressive moves for close on a year at this stage. Consumers in Spain have benefited to the tune of €1.4 billion in a couple of months because their Government took progressive and aggressive action to deal with that. Now, at the eleventh hour, the Minister is eventually making a massive U-turn on behalf of the Government. It is absolutely incredible. Will he answer the question as to why he opposed those progressive measures almost 12 months ago?

Photo of Eamon RyanEamon Ryan (Dublin Bay South, Green Party)
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There is no U-turn. I work very closely with the Spanish Minister and find we agree on a lot. I do not believe the measures introduced in Spain would work well here and that is why I prefer the approach we are taking. There were knock-on consequences in Spain, including a massive transfer of exports of energy to France, from which the latter benefited. There would potentially be the same consequences here. We could see a major transfer of wealth from Ireland to Britain if we adopt the exact same measures. Different markets have different circumstances but that was my assessment of it. If the Deputy's party is proposing we take the approach of a cap-----

Photo of Darren O'RourkeDarren O'Rourke (Meath East, Sinn Fein)
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We are proposing a cap and a windfall tax.

Photo of Eamon RyanEamon Ryan (Dublin Bay South, Green Party)
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-----I again make the point that this would benefit the wealthiest households and the energy industries. I do not think that is what we need to do at this time.

Photo of Darren O'RourkeDarren O'Rourke (Meath East, Sinn Fein)
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The Minister's proposals will benefit people with holiday homes.