I move:
That Dáil Éireann:
notes that:
— according to the latest Consumer Price Index (CPI), the rate of inflation illustrates a 9.2 per cent cost of living increase between October 2021 and October 2022;
— inflation is now at its highest level in Ireland since 1984 when it was 9.7 per cent, according to Central Statistics Office data;
— the main drivers of inflation in Ireland are energy costs;
— last month was the thirteenth consecutive month where Ireland's rate of inflation, as measured by the CPI, was greater than 5 per cent;
— in Ireland, the cost of gas has spiked 93.3 per cent in the last 12 months, the cost of electricity by a staggering 71.2 per cent, the cost of home heating oil by 65 per cent, and solid fuels up 47 per cent;
— the cost of heating and keeping the lights lit at home, in small businesses, schools and community facilities are becoming extremely challenging for many and forcing several more into undisputed poverty;
— over the same period, the Government has completely failed to take any steps whatsoever to tackle the root causes of energy-induced inflation; and
— during this energy cost inflation crisis, the Government has allowed energy suppliers in Ireland, including renewable energy producers, to make record financial profits on the back of ordinary Irish consumers;
further notes that:
— within Ireland's Integrated Single Electricity Market (I-SEM), there are markets for energy, generation capacity and system services, and this model includes day-ahead and intraday markets;
— generators bid into these markets based on market rules, which are set by the Government and/or the Commission for Regulation of Utilities (CRU);
— the market price is determined by these market rules and referred to as the marginal cost of generation capacity, therefore, forming a central component of the wholesale electricity price benchmark;
— the average wholesale price for a megawatt hour (MWh) of electricity in August was €387.63, which is the highest monthly figure this year;
— wholesale electricity prices decreased significantly by October in many European countries, including Ireland, due mainly to a temporary fall in the price of natural gas and an increase in wind energy production, yet consumers are not seeing the benefits of this;
— while the market price is reduced when there are greater levels of lower cost generation, such as on windy days, the benefits to the public have been minimal or non-existent;
— the high electricity prices being seen in Ireland are a direct result of the significant increases in natural gas prices but also of the massive profits being made by energy suppliers, including renewable producers, due to the marginal pricing model;
— the price increases have severely impacted gas and electricity consumers nationwide, as the I-SEM in Ireland fails to protect the consumer; and
— European Union (EU) Council Regulation 2022/1854, which entered into force on 8th October, 2022, with direct effect in Ireland, provides for emergency interventions, including a cap on market revenues that certain producers receive from the generation of electricity and lower price setting for supply to households and Small and Medium Enterprises;
calls on the Government to:
— outline the number of occasions over the past year that concerns over marginal pricing and the I-SEM mechanism have been raised with the CRU by the Minister for Environment, Climate and Communications; and
— outline the number of occasions over the past year that the CRU, through its Market Monitoring unit which is required to monitor the behaviour of market participants in the I-SEM, have raised formal concerns or made determinations surrounding a lack of openness, transparency, or competition by market participants; and
further calls on the Government to:
— immediately implement, in full, the agreed objectives of EU Council Regulation 2022/1854 to:
— reduce electricity consumption by power-hungry data centres, which now consume more electricity, 14 per cent of national usage, than all rural homes;
— introduce a rigid cap on market revenues that energy producers here receive from the generation of electricity and redistribute those funds to final customers in a targeted manner;
— note that the regulation outlines a maximum cap on market revenues of €180 ($180) per MWh for producers and intermediaries generating electricity from wind, solar, geothermal, hydropower, biomass fuel, waste, nuclear energy, lignite, crude petroleum products and peat;
— accept that the cap is one of the best ways to reduce domestic and small business electricity prices, with renewable energy producers still well able to recover their investment and operating costs;
— implement electricity price-setting for the supply of electricity for households and small- and medium-sized enterprises and accept that the current Irish wholesale pricing system is broken, as prices for all market participants are set by the last plant needed to cover the demand, which is the plant with the highest marginal costs when the market clears, and given the unprecedented rise in costs for gas and coal-fired power generation facilities, this generally results in such plants establishing the price and simultaneously results in exceptionally high prices in the day-ahead market, with renewable energy producers experiencing very significant increases in their revenues; and
— immediately seek to implement an excess profit "solidarity tax", as provided for in EU regulation 2022/1854 upon all/any companies and permanent establishments operating within the oil, gas, coal and refinery sectors in Ireland, which include the Corrib gas field, and give these funds back to consumers to help pay for energy bills;
— end the Government practice of having lucrative long-term deals with energy companies that allows them to inflate prices while obtaining Government subsidies, simultaneously burdening working-class consumers with sky-high energy bills; and
— accept that the time for inaction is over, and it is no longer tenable to hide behind EU rules or regulations now that the road is cleared to implement a change of energy pricing policy that will directly benefit consumers.
Everywhere I go, I am asked why energy prices are going up so much given we are using renewable energy sources, which all consumers can see on their electricity bills. These show that renewables account for more than 60% of our bill. The Rural Independent Group and I have made it our mission to find out about fuel costs. We have been shut down many times in this House over continuing to ask questions. Why is the production of wind energy costing the same as that of gas, oil, coal and peat? Gas, oil, coal, peat and renewables are all commodities for sale in the market. Gas is the most expensive commodity currently, so energy sold in the market will be sold to all the energy companies at this highest price. Some 96% of all wind energy produced in Ireland is priced at the same rate as gas, even though the production costs may be a fraction of the price charged. In layman's terms, if gas costs €1,000 per kWh and generating electricity via wind costs €10 per kWh, then the producer will sell to the providers at the highest component price, that is, at €1,000 per kWh.
What is going on here? This is wrong. This is unlawful. Does the Minister, Deputy Eamon Ryan, know this? Alternatively, does he know this and has he decided to ignore it? This is the Minister who went on Twitter last week and stated it was great that Ireland was producing all its wind energy cheaper than gas. We are, however, paying for wind energy at the same price as gas. Does the Minister of State get this? We are paying for wind energy, which accounts for 60% of our electricity bills, at the same price as gas because of an outdated regulation. There is no benefit to Irish consumers because we are paying the marginal cost, that is, the highest provider cost, of energy and this sets the parameter for all suppliers.
This motion from the Rural Independent Group seeks to decouple the price of renewables from the marginal cost system, separate the pricing of renewables from that of fossil fuels, compare both and see where value lies. The Commission for Regulation of Utilities, CRU, has stated that the renewable suppliers, such as those producing wind energy, are being paid 600% more than the predicted price over 12 months. The predicted price at that stage was €50 per MWh. What are these suppliers getting today? They are getting €370 per MWh. This is the great wind farm rip-off, where greedy energy giants are selling us wind-generated electricity at sky-high wholesale gas prices. The massive wind energy generation companies operating here are making record profits by selling the energy generated by wind.
We just want the Minister of State to get this part. On top of the energy costs we are paying, we have seen the ESB receive record prices and make €1.063 billion in profits last year. This company is 96% State-owned. At a meeting the Rural Independent Group had last week, it was explained to us that this has come about because of a regulation that must be changed. The benchmark for supplying energy in this country is based on the highest marginal cost, which at the moment is that for gas. For example, therefore, if we are producing wind energy at €10 per kWh while gas is costing €100 per kWh, this will mean we are paying €100 per kWh for wind energy. Again, this is wrong. This also includes the VAT receipts the Government takes back on energy. It is putting businesses out of business.
On top of this, the Government is about to give €12.5 billion to green power and to these self-same wind farms under the renewable electricity support scheme, RESS. Our motion aims to implement European Council Regulation 2022/1854, that came into effect on 8 October 2022 and forces all member states to implement numerous measures to protect consumers, notably by capping the profits of wind energy producers and reducing energy consumption by sectors, such as data centres. The fundamental problem is not being looked at. I will say this again to the Minister of State to make him get this point. The fundamental problem is that all the energy sources contributing to the cost of our bills are being charged at the same high price as that of gas, even though we are producing wind energy at a low cost. These companies have all shown billions of euro in profits because of the regulation in place and now the Government wants to give them another €12.5 billion, despite these companies having absolutely cleaned out this country by charging us extortionate prices under a law that can be changed and in the context of an EU directive, which allows capping. The Government, however, has sat on the fence and done nothing to help people. Businesses are closing day in and day out because of energy costs.
Inflation is at 9.7%, which is the highest level since 1984 according to the figures from the Central Statistics Office, CSO. The gift of €600 towards fuel costs is one of the drivers of inflation. It is no gift, but a token gesture. In the context of all the astronomical prices we are paying, through no fault of our own, we are only getting crumbs from the table. The Government is going to pay this €600 in segments of €200. Householders will get €200 provided towards their energy costs, but they will be paying for this energy at the level of gas prices, even though the energy companies are producing the energy at a lower cost. Under the regulation in place, however, the companies are required to charge a price at the high cost. The ESB has made a record profit of €1.063 billion, but it has been told it cannot give these profits back in any way to consumers because it would be regarded as below-cost selling under competition law and the Government would bring in representatives of the company and ask them why they were doing it, despite the ESB being 96% owned by the State.
The €600 the Government has allocated to every household, therefore, is a gift, but an inflationary one. If we were to go to any butcher, coffee shop or any other employer, such employers would tell us their ESB bills have gone up by 500% and 600%. This means the cost of producing food and keeping freezers on, to protect it for people, has gone up by 600%. The Government then came out to say that it will pay a maximum of €10,000 to any business which can show its electricity costs have gone up. We are talking about businesses whose monthly ESB bills have gone from €1,000 to €6,000. These costs have jumped by 500%. We must consider that the sum of €10,000 spread over a year will only give these businesses €800 a month towards their bills. This will mean they will still have to pay €4,200 to keep the fridges and lights on for consumers. The Government has given this €600 to consumers who will then be going back to the same shops that will now have to raise their prices by 300% and 400% to keep the lights on. This is because this Government has not protected these businesses.
This all comes back to one thing; we are paying for renewable energy costs at gas prices.
It is whatever the market price is and whatever the highest price is for any of the energy providers. That is benchmarked under law. That law was there more than two years ago when the Rural Independent Group first raised the issue of the cost of fuel coming into this country. Europe has given the Government the way forward on how to do it but the Government is still sitting on its hands. All it is doing is giving more money to these same companies that are charging extortionate prices to everybody in the country. This is going to close down every business. Multinational businesses might be able to afford it but every small shop and SME is being held to ransom by the Government as a result of the failure to tackle energy costs or to implement the regulation of energy under EU Regulation 2022/1854. That is it in a nutshell.
The Minister, Deputy Eamon Ryan, said on Twitter that wind energy is being produced in this country at prices cheaper than gas prices but, just to make people suffer, they are being charged for electricity based on the price of gas while the Government is going to give more funding to wind energy farms that are already making billions of euro. The Government is going to give them more funding to charge people more and put companies out of business.