Terence Flanagan (Dublin North East, Fine Gael)
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420. To ask the Minister for Communications, Energy and Natural Resources the recent representations he has received regarding the impact on consumers of high oil prices; and if he will make a statement on the matter. [2585/13]

Pat Rabbitte (Dublin South West, Labour)
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From time to time I receive representations in relation to the prices of oil products and their impact on consumers.

I have no statutory function in the setting of oil prices. The Irish oil industry is fully privatised, liberalised and deregulated and there is free entry to the market.

The taxation of oil products is a matter for my colleague the Minister for Finance.

The upward trend in global oil prices arises primarily from the increases in the international commodity prices over which Ireland has no control. For example, the spot price of a barrel of Brent Crude Oil has risen from a low of US$90 in June 2012 to US$111 in January 2013. This has inevitably resulted in an increase in retail oil prices.

Against this background my focus, and that of the Government, is on interventions that can assist in mitigating to some degree, increases in energy prices.

At a general policy level this involves measures to improve energy efficiency and increase the penetration of renewable energy resources in the areas of electricity and transport.

I am very aware that many households are experiencing financial hardship due to the current economic difficulties. As such, the Government is taking a range of actions to address the challenge of affordable energy for vulnerable households. Over the last ten years €2 billion has been distributed in energy supports under the National Fuel Scheme and the Household Benefits Package administered by the Department of Social Protection.

In addition, €100 million has been spent, from my own Department’s Vote, on energy efficiency improvements in vulnerable homes. Permanent improvements to the thermal efficiency of houses are the most cost-effective means of addressing energy poverty.

The Sustainable Energy Authority of Ireland (SEAI) administers on behalf of my Department, the Better Energy Warmer Homes Scheme, which is free-of-charge to eligible applicants. With over 93,000 homes refurbished to date, 2013 will see approximately 10,000 low-income households benefit from energy efficiency upgrades. I have allocated approximately €20 million to the Warmer Homes Scheme in 2013.

More generally, the Government’s Strategy for Affordable Energy in Ireland was launched by me in November 2011. The Strategy sets out our plans for enhancing the affordability of energy for low-income households. The strategy includes 48 actions that will be implemented over the life of the Strategy.

The Inter-Departmental Group on Affordable Energy has established subgroups to work on particular dimensions of the Strategy. These include the implementation of revised eligibility criteria for the Warmer Homes scheme and a pilot programme to assess the feasibility of an area-based approach to delivery of the Scheme.

In the area of transport the development of electric vehicles offers potential for Ireland, not just in terms of energy efficiency but also because of the ability to use cheaper grid sourced electricity, an increasing amount of which will be sourced from renewable resources as we progressively deliver on our ambitious target of 40% renewable electricity generation by 2020. The Government has introduced a grant scheme for electric vehicles to provide an incentive to encourage their uptake.

In addition, the Biofuel Obligation Scheme incentivises and enables the sustainable growth of an Irish biofuels market affording opportunities for indigenous biofuel producers and allowing for the displacement of traditional oil products in the transport sector.

The Statutory Biofuel Obligation Scheme was introduced in July 2010 and currently requires that the amount of biofuel brought to the market is not less than 6.38% of the relevant disposal of petroleum road transport fuels. The Scheme ensured that 144.5 million litres of biofuel were brought to the Irish market in 2011. The Better Energy programme provides Exchequer supported incentives for energy efficiency and renewable energy upgrades, as well as bringing on board energy suppliers as partners to directly offer upgrade services to consumers.

Delivery on these commitments will progressively reduce our dependence on imported fossil fuels, while supporting energy competitiveness and security.

Terence Flanagan (Dublin North East, Fine Gael)
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421. To ask the Minister for Communications, Energy and Natural Resources the steps he is taking to reduce domestic energy bills; and if he will make a statement on the matter. [2589/13]

Pat Rabbitte (Dublin South West, Labour)
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I have no statutory function in the setting of gas or electricity prices, whether in the regulated or non-regulated parts of these markets. Responsibility for the regulation of the retail electricity market is a matter for the Commission for Energy Regulation (CER), which is an independent statutory body. Since 4 April 2011 prices in the electricity retail market have been fully deregulated and business and domestic customers can as a result avail of competitive offerings from a number of electricity supply companies. Price setting by electricity suppliers is a commercial and operational matter for the companies operating in the retail market.

With regard to the regulation of gas prices the position is that up until 1 October 2011 the CER regulated Bord Gáis Energy tariffs for its residential and smaller business customers but price regulation for the latter group ended at that point. The CER still regulates the Bord Gáis Energy tariffs for its residential customers. I have no function in the matter. The timing for complete deregulation of the residential segment of the gas market, as has taken place in the electricity market, is an issue under active review by the CER.

In making its decision, the CER takes account of the need to protect consumers from unnecessary price increases by ensuring that only reasonable legitimate costs are recovered by BGE. Full deregulation leading to further competition will keep downward pressure on prices for consumers. In particular, Ireland is a price taker for gas.

The Government is most concerned at the impact of higher energy prices on residential and commercial consumers. It is the case however, that Ireland in the main, is at the mercy of international fossil fuel prices which dictate the retail price of electricity and gas, which is the key factor in the retail price of both electricity and gas. My focus is on those elements of energy costs over which policy can exercise some control.

The long term policy responses for Ireland to combat vulnerability to high and volatile gas prices continue to be increasing the use of renewables, better energy efficiencies and reducing the reliance on gas in the fuel mix.

Implementation of the measures set out in the Government's Affordable Energy Strategy is also key to protecting the interests of vulnerable customers. The Affordable Energy Strategy was published in November 2011 and developed by the Inter-Departmental/Agency Group on Affordable Energy (IDGAE) as part of the Department's commitment in the Programme for Government to help mitigate energy poverty.

There are forty-eight actions identified in the strategy to be implemented over the lifetime of the report (3 years). Five priority measures are identified including: a commitment to review the National Fuel Scheme in the context of examining the feasibility of aligning income supports with the energy efficiency and income of the home; the phased introduction of minimal thermal efficiency standards for rental accommodation; ensuring greater access to energy efficiency measures; reforming the eligibility criteria for energy efficiency schemes; and the introduction of an area based approach.

The Affordable Energy Strategy provides a framework for building upon the many measures already in place to protect households at risk from the effects of energy poverty, which include the thermal efficiency based measures delivered through the Better Energy Warmer Homes programme. Exchequer funding of over €101 million has been allocated to the programme since 2000 and has successfully delivered energy efficiency measures to 92,563 homes through a combination of community based organisations, private contractors and via an area-based approach. The Government will continue to support the delivery of energy efficiency measures to vulnerable households in 2013. Better Energy Warmer Homes has been allocated €20 million for this purpose.

There are also a number of avenues open to consumers to try to mitigate rising electricity prices, and measures are also in place to assist them. Accordingly, consumers can and should shop around to get the best possible price and service deal from suppliers, and switch supplier if necessary bearing in mind that all suppliers can and do offer competitive prices and products. Consumers can also take steps to improve the efficiency of their electricity usage which delivers demonstrable savings including availing of Government funded measures as already referred to above. The CER is also working with energy suppliers to ensure that vulnerable customers are protected through, inter alia, the installation of Pay As You Go meters.