John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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48. To ask the Minister for Communications, Climate Action and Environment how the Government will reduce energy costs for businesses in 2023; how the EU reform of the electricity market will impact these plans; and if he will make a statement on the matter. [11903/23]

John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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62. To ask the Minister for Communications, Climate Action and Environment how he intends to reduce energy bills for business customers throughout 2023; how the upcoming EU electricity market reform will feed into such plans; and if he will make a statement on the matter. [11900/23]

Eamon Ryan (Dublin Bay South, Green Party)
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I propose to take Questions Nos. 48 and 62 together.

The electricity retail market in Ireland operates within a European Union regulatory regime wherein electricity markets are commercial, liberalised, and competitive and prices are no longer regulated. Operating within this overall EU framework, responsibility for the regulation of the electricity and gas markets is solely a matter for the Commission for Regulation of Utilities (CRU), which was assigned responsibility for the regulation of the Irish electricity and gas markets following the enactment of the Electricity Regulation Act (ERA), 1999.

Nevertheless, Government recognises the difficulties businesses are facing due to the unprecedented increase in energy costs resulting from the military aggression by Russia in Ukraine. The Temporary Business Energy Support Scheme (TBESS) was introduced to specifically address these challenges and Government have now made amendments to this scheme, to ensure businesses continue to be fully supported during this time.

The scheme was designed to support qualifying businesses in respect of energy costs relating to the period from 1 September 2022 to 28 February 2023, subject to monthly caps. However, in order to facilitate the continuation of the scheme, the Minister for Finance has exercised the power contained in Section 100 of Finance Act 2022 to extend the scheme to 30 April 2023.

From 1 March, the monthly limit on aid under the scheme is also increased to €15,000 per qualifying business in relation to a trade or profession, subject to an overall cap of €45,000 in cases where a business is carried on from more than one location.

Moreover, Government proposes to make a number of further amendments to the scheme. These changes will require State aid approval and subject to receiving that approval will be provided for in the forthcoming Finance Bill. The additional changes are as follows:

- The Scheme will be extended, to 31 May 2023

- The threshold for qualification will be reduced from a 50% increase in electricity or gas costs to 30%increase (to apply retrospectively from 1 September 2022)

- From 1 March 2023 the level of relief will increase from 40% to 50% of eligible costs

Pending implementation of these changes, claims can continue to be made under the current scheme, with full details available on the Revenue website at the following link: Qualifying criteria for eligible businesses Making a claim (revenue.ie)

The European Commission launched a public consultation into electricity market reform on 23 January. Ireland submitted a position paper on the 13 February and while we are supportive of reform, we should not depart from the competitive principles of our market design, which would undermine the cost-effective decarbonisation of our energy system, jeopardize affordability and risk security of supply.

We need to strike the right balance in relation to investment opportunities to accommodate increasing renewable penetration, as well as flexibility signals for storage, demand side response and back up generation technologies. It is critical that market design and energy market contracts operate so that consumers (including businesses) receive the full direct benefit of low-cost renewable energy sources such as solar and wind.

The European Commission has indicated that it will publish its proposal by end of March 2023.