Tuesday, 28 September 2021
Nithe i dtosach suíonna - Commencement Matters
I encourage Senator Garvey to hang on, because I have some comments about the PSO levy as well as on something the Government could do to bring down the cost of energy. This is not my first time raising energy poverty in this House. I published a report earlier this year that detailed real lived experiences of people who are living in energy poverty. The latest figures suggest that 2,800 excess deaths a year are due to cold weather. Other people are sacrificing other essential items just to keep the lights on and their houses warm.
My first question for the Minister of State is on the energy poverty strategy, which lapsed in 2019. We have yet to see a new strategy, so there does not seem to be any urgency in this Government about addressing energy poverty. While the rising cost of energy this year is happening on a global scale, that does not mean that we can take a laissez-faireapproach to how we address energy poverty. We must have a strategy that identifies which households are most in need of action, and on how we will address those households to ensure we can lift them out of energy poverty.
We know from a Department of Public Expenditure and Reform report in 2020 that we do not have adequate data about energy poverty. A report in 2015 that was commissioned by the Department of the Environment, Climate and Communications stated that energy poverty in Ireland could be anything from 25% of households, and up to 50% of households in the north west of the country because of one-off housing that relies on solid fuels. However, the report in 2020 - five years after the 2015 report - shows that we still do not have adequate data to identify those households in energy poverty. Yet, the Government is dead set on increasing the carbon tax. It is going to introduce a nationwide smoky fuel ban, which of course we need. However, if we do not know which households will be directly impacted by those rising costs and by that smoky fuel ban, then how are we going to help those households?
Of course, any increases in the budget in terms of social welfare transfers are to be welcomed. However, we also need direct State intervention to identify the households and to reduce the cost of energy. It is regrettable that the Government and the CRU have told people to shop around when they did not take account of how hard it is for people to do that. Some people do not have the capacity to shop around. They might not have a credit rating that allows them to do that. Those households that struggle to make ends meet are advised to go on pay-as-you-go metering, which has a higher tariff, so they are being punished for not having adequate income to cover their bills.
One of the things the Government should be looking at is increasing the doors and window fund to make it easier for local authorities to identity those households. That would be a short-term stopgap to make those homes warmer for people and it would reduce their energy costs.The other aspect concerns the PSO levy. It exists to subsidise renewable energy but it is calculated on the basis of peak demand usage. That allows data centres off the hook when it comes to paying their fair share of the PSO levy. Data centres do not have high peak demands. Instead, they have a steady demand during the day. Households are therefore subsidising the PSO levy on behalf of data centres. The Government could do something to address this issue directly by adjusting the PSO levy and making it apply to demand usage and not peak demand usage. That could be done overnight. Those are two measures that could be taken. I also ask the Minister of State to advise me regarding when we are going to see indicators from the Central Statistics Office, CSO, to allow for the proper identification of those households most in need in respect of energy poverty.
I thank Senator Boylan. This is an important issue. Energy poverty is influenced by people's income, the energy efficiency of their home and the cost of the energy they use in their home. Government policy, therefore, focuses on supplementing lower-income households through the fuel allowance and other payments, as well as by providing free energy efficiency upgrades via the Sustainable Energy Authority of Ireland, SEAI, schemes and the social housing retrofitting programme.
The Government’s strategy to combat energy poverty was published in 2016 and it is being reviewed at present. Since the publication of the strategy, good progress has been made to alleviate the burden of energy poverty on the most vulnerable in society. I will detail some of the achievements in that regard. The share of households at risk of experiencing energy poverty has reduced from 28% in 2016 to 17.5% in 2020. The proportion of people reporting that they are unable to afford to keep their home adequately warm has fallen from 9% in 2015 to 4.9% in 2019. The funding provided for SEAI energy poverty retrofit schemes has increased dramatically from €15 million in 2015 to more than €109 million in 2021. The fuel allowance has also increased from €20 per week in 2014 to €28 per week in 2021, and it is paid to people receiving long-term social welfare payments, including pensioners, people with disabilities, those parenting alone and jobseekers. The allocation for the retrofitting of social housing has increased, with €65 million allocated for 2021. Free upgrades were carried out in more than 24,000 lower-income homes under the main SEAI energy poverty retrofit schemes. In addition, the Housing for All strategy has committed to introducing additional rent controls that will result in rental properties having a required minimum building energy rating, BER.
Energy efficiency measures are central to addressing one of the root causes of energy poverty. Since 2018, the level of retrofitting under the SEAI schemes has increased from an average value of €3,000 per home to €17,100 per home. This means that those households are more protected from changes in their income or energy costs. The fuel allowance is provided to an estimated 370,000 households across the State. A budget of €292 million has been set aside for the upcoming season. A household benefits package is also available to eligible households and can be used towards meeting the cost of electricity or gas bills. The Department of Social Protection also funds an exceptional needs payment, which can in some cases include support with fuel bills.
Responsibility for the regulation of Irish electricity and gas markets is a matter for the CRU. Protections are in place for those falling into difficulties with their energy bills and suppliers will not disconnect customers who engage with them. The programme for Government and the climate action plan set ambitious targets to retrofit 500,000 homes to a BER rating of B2 and to install 400,000 heat pumps in existing buildings over the next decade. A new national retrofit plan will be published in quarter four of this year and the plan is designed to address barriers to energy efficiency investments in four key areas, namely, customer proposition, demand generation, financing and affordability, supplier capacity and governance.
The programme for Government has committed to ensuring that the retrofit programme is socially progressive, with a focus on lower-income households. This commitment will not only help in reducing our carbon emissions, but also, more importantly, benefit lower-income householders in many ways. Homes will be warmer, easier to heat and more comfortable and will also support improved occupant health and well-being, especially among vulnerable groups. The retrofit programme will also stimulate employment generation in what is a highly labour-intensive sector, with the potential to create high-quality sustainable jobs in local communities throughout the country.
I thank the Minister of State for that update. I question the figures, however, in respect of how we have identified reduced numbers of people experiencing energy poverty. I again draw the Minister of State's attention to the report from the Department of Public Expenditure and Reform entitled, Spending Review 2020: Social Impact Assessment – SEAI Programmes Targeting Energy Poverty.That report says we do not have the metrics to adequately assess how beneficial the retrofitting programme has been in lifting people out of energy poverty and that in order to do that we must collect the correct data to be able to assess whether or not our retrofitting programmes are working and whether they are actually identifying the households most in need. The CSO indicated to do that by quarter 4 of 2020 and we have not seen that data. Perhaps the Minister of State will update us on when we will see those CSO indicators. Then the data he is quoting can be backed up by credible statistics.
I appreciate the Senator's sincere concerns about the data and the sources. She is absolutely right to ask those questions. I am happy for my office to engage with hers if she wants to follow up and get references on where the data come from. On the specific point about when the CSO is going to publish its indicators, which I think is the Senator's question, I will come back to her with the details on that rather than give a response that is not accurate. It absolutely is important to track these things. One of the most important things any Government does is keep older people warm in their houses during the winter. If there is one thing we can do that we can feel emotionally attached to, it is that. It is measuring what proportion of people are cold in their homes from year to year, seeing if we are making progress with that and ensuring our policies are empathetic and take account of people's real lives. That is important. I am willing to communicate directly with the Senator on that if she wants to follow up.