Pa Daly (Kerry, Sinn Fein)
Link to this: Individually | In context

99. To ask the Minister for Environment, Community and Local Government the measures he is taking to address the high cost of energy; if he is planning to rule out categorically an additional levy on household bills to contribute to the proposed strategic emergency gas reserve; and if he will make a statement on the matter. [30270/25]

Darragh O'Brien (Dublin Fingal East, Fianna Fail)
Link to this: Individually | In context

On 4 March this year, I received Government approval to proceed with the development of the State-led strategic gas emergency reserve, securing Ireland's energy system, which all would agree is essential. I will continue to take decisive action to protect Ireland's economy and citizens from the potential of a catastrophic impact on or disruption to our gas supplies.

The delivery of temporary gas reserves is critical to Ireland's energy security as we continue the transition to indigenous, clean renewable energy. Crucially, the strategic gas emergency reserve will also ensure compliance with EU standards and regulation. In identifying this as the optimal approach, the Department has built upon the extensive review of the security of Ireland's gas and electricity systems published in the energy security package in November 2023. The emergency reserve will be in the form of a floating storage and regasification unit to be owned on behalf of the State by the system operator, Gas Networks Ireland, GNI.

The standard approach for cost recovery for security of supply measures and investment to meet EU regulations is through the existing regulatory framework and is achieved over the lifetime of the asset. Identifying opportunities to minimise the impact of the cost on energy consumers is a key workstream of this project. GNI is now progressing the project through the relevant planning and regulatory structures.

Given the risk we seek to address, all options to accelerate delivery of the project are being pursued. The final cost to deliver the strategic gas emergency reserve and cost recovery model are being assessed as we progress the project through the detailed design phase, and every effort will be made to minimise the cost to consumers. The final investment decision will be subject to Government approval and will be supported by independent assessments undertaken by the financial and commercial advisory authority, NewERA, as well as the Commission for Regulation of Utilities.

Pa Daly (Kerry, Sinn Fein)
Link to this: Individually | In context

It is interesting that the Minister mentioned the independent surveys and the recovery model because as he knows, Irish households are crippled by the most expensive electricity prices in Europe. Average electricity costs here are almost €1,800 per year, €350 more than the European average. The Government parties all promised they would introduce measures to help with the cost-of-living crisis when they were campaigning last November. Despite this, energy prices are 61% higher than they were in 2022. The Government has ruled out energy credits this year, saying they cannot become the norm. People are struggling, yet as part of the energy security review, the Government has suggested another levy, which would push up bills even further.

When the Minister says temporary, what timeframe does he have in mind? The last time we were here, the Minister said he would publish the CEPA and GNI reports. Will he publish them? Will the Minister categorically rule out any new levy on household bills? I ask him to do so. Will he ensure that the PSO levy network charges are distributed more fairly?

Darragh O'Brien (Dublin Fingal East, Fianna Fail)
Link to this: Individually | In context

That report will be published this week. If anyone wants a briefing on it with officials, it will be available to colleagues. It is important that people understand the risks we are trying to mitigate.

I restate that the programme for Government acknowledges the growing energy price and cost pressures on households and businesses and commits to bringing forward measures to contain these costs. The Government recently approved an extension of the 9% VAT rate currently applied to gas and electricity by a further six months to October 2025. That will cost an estimated €85 million and it will be looked at again in the context of the budget.

My Department has established a cross-government energy affordability task force to identify, assess and implement measures that will enhance energy affordability for households and businesses. It is crucial that we do that. The focus of the task force will be on medium- and long-term structural reform measures to address high energy costs in line with the EU action plan for affordable energy.

Pa Daly (Kerry, Sinn Fein)
Link to this: Individually | In context

There is an awful lot the Minister can do to bring down household electricity prices. The additional costs on household bills make up around 50% of the final electricity price to consumers. The programme for Government omitted any mention of network charges. It gave a vague commitment to explore funding models for the PSO to reduce bills. Is the Minister going to do that? He can tackle the regressive PSO levy on network charges now because network charges could be four times what they are now following the conclusion of price review 6. This burden could and should be distributed fairly, rather than ordinary householders being forced to bear the brunt. Grid upgrade and repair could also be financed through Exchequer funding rather than levying it on top of household bills. We also need to look at the role of the regulator, which needs to be strengthened. Is the Minister going to make these charges? Will he distribute network charges and the PSO levy to reduce the energy burden on households, if he is not going to introduce the other measures?

Darragh O'Brien (Dublin Fingal East, Fianna Fail)
Link to this: Individually | In context

Everyone agrees that we need substantial further investment in our grid, and price review 6 will bring that forward later this year. As part of the NDP, we are looking at other ways by which we can fund investment in our grid, which is critical to ensure we can realise the potential of more onshore and offshore renewables.

Later this week, the Deputy will see a decision on the PSO, which I think will be welcomed by many. I will not pre-empt that decision but the word I have on it so far indicates it will result in a reduction in the PSO for the year to come.

Ireland's energy network is different from many others. The fundamental issue is how energy prices are struck at EU level and the link to wholesale gas prices. I intend to raise that with EU colleagues at the Energy Council next week. We need a bigger and broader discussion on that as countries like Ireland expand their renewable resource. Last year, 40% of our energy was generated through renewable resources. There are many things we can do and we will work towards them.

Pa Daly (Kerry, Sinn Fein)
Link to this: Individually | In context

There will be plenty more announcements this week.