Tuesday, 20 September 2022
Ceisteanna Eile - Other Questions
59. To ask the Minister for Communications, Climate Action and Environment if he will report on the emergency meeting of the energy ministers of the 27 member states of the European Union on 9 September 2022; and if he will make a statement on the matter. [45775/22]
What was decided at the emergency meeting of energy ministers of the 27 member states held on 9 September? Will the Minister inform the House as to what actions he intends to take as a result of that meeting?
I thank the Chair for facilitating the question and the response.
The extraordinary energy council meeting on 9 September in Brussels was to exchange views on the energy situation in the European Union. The meeting was split into two parts, with the first session covering policy options to alleviate the burden of high energy prices. The second session was on the state of play of the preparedness of member states for the coming winter.
In respect of higher energy prices, the council discussed in private session four main areas on which member states expected the Commission to act. These included capping the revenues of electricity producers that face low production costs, a possible price cap on gas imports, measures for a co-ordinated electricity demand reduction across the EU, and measures that would help to address the issue of decreased liquidity for market participants. The Commission has since published a draft regulation, which is under urgent negotiation by member states in order to have agreement by the end of the month. We are supportive of the overall approach being taken and will co-operate closely with other member states to get the regulation agreed swiftly.
Ministers also discussed the state of play of preparedness for this winter. EU member states have carried out several actions at both national and EU level. In particular, they have adopted a regulation to fill gas storage and to share gas in a spirit of solidarity, diversified supply sources and committed to reducing gas demand by 15% this winter. EU gas reserves have been filled to 82.5% of their capacity, well ahead of the 1 November deadline set in the gas storage regulation.
There was a fifth issue we discussed in the earlier session, looking at what measures we could take on global gas markets, particularly LNG markets, where we could use our purchasing power, perhaps in co-ordination with other countries, in Asia or elsewhere, to try to help reduce market prices that way as well. That did not conclude, or has not concluded yet, with a specific proposal, but we gave a clear mandate for the Commission to investigate what might be possible in that regard.
I thank the Minister for his response. I am aware of the points that were made. With respect to the proposal to reduce gas use by 15%, does the Minister see that happening here and, if so, how soon? How would he encourage that reduction?
While that was a key matter for discussion, there were different consequences for three members of the European Union: us, Malta and Cyprus. At an earlier meeting of the European Energy Council there had been agreement that we would not have to apply in Ireland the same mandatory reduction. It was also recognising the reality in our case that we are connected to the UK and Norwegian gas markets and are not dependent on Russian gas in the same way. Therefore, any requirement for us to reduce our gas use by 15% would not have material consequences in terms of the use or otherwise of Russian gas. As a result, I stated that we have committed very much on a voluntary basis to do everything we can to reduce our use. We need to do that for sound economic reasons in any case, but that mandatory 15% reduction in gas does not apply to Ireland in the exact same way as it does to other member states.
Another proposal was to reduce the revenues of inframarginal electricity producers with low costs of production. Does the Minister plan to take that on board as a proposal and, if so, how does he plan to put it into practice?
Since last year, I have been raising the need to end the crazy situation whereby sky-high gas prices set the price for all electricity, and the need to decouple electricity prices from gas prices.
Each time the Minister and the Taoiseach and the Tánaiste have dismissed it out of hand. It is unacceptable for the Minister to continually hide behind the EU. Energy policy is a shared competence between the EU and member states. It is simply not good enough for the Minister responsible for energy to take such little responsibility during the cost-of-energy crisis.
I want the Minister, here and now, to clarify his position on the decoupling of gas from the setting of the price of electricity. Has that changed since the Taoiseach said that it was not his analysis and since the Minister dismissed it before when I raised it in the Chamber months ago?
In response to Deputy Stanton, inframarginal pricing is the right measure and one which we are looking to implement. There are complexities involved in it. It will apply to the likes of wind farm or other generators that are generating without the impact of high-input gas price, therefore, it is likely that they are making a significant profit. Inframarginal pricing will not apply where they have a long-term contract or where a cap is in effect. It will not apply to the recently agreed renewables projects because they also have a cap on their system. It is measure we want to introduce, however.
In response to Deputy Conway-Walsh, if anyone thinks that it is easy and that there is a perfect market mechanism-----
-----I would love to hear it, because the complexity and design and development of energy markets is not something that one can be easily categoric about. It is complex. What was also considered by the energy Council, and what we are intricately and centrally involved in the European Council - the Deputy is right; it is a joint competence - is the conducting of a wider review, starting with recognising that it takes time. If anyone thinks that we can change the energy markets this winter at a click of a finger, they would not be doing the people a favour because that is not easily achieved. It is better for us to do the review in conjunction with other countries. There are different views. A categoric answer would not be an honest answer.