Dáil Éireann Debate, Wednesday - 24 May 2023
56. Deputy Darren O'Rourke asked the Minister for the Environment, Climate and Communications if he has met with energy companies regarding the fall in wholesale energy prices; if these will be passed onto the customer; when this is likely to happen; and if he will make a statement on the matter. [25083/23]
View answerThe War in Ukraine has resulted in an unprecedented rise in Energy prices and is a major challenge for households and businesses throughout Ireland and across Europe.
The increases in costs for consumers has caused hardship for many people and this is most pronounced over the winter months when energy use is at it highest. That is why the Government has taken sustained action over the past year, to support households and businesses to meet the cost of living challenges. Direct measures to reduce energy bills include the €800, in total, of energy credits between April 2022 and April 2023, reductions in VAT and the Temporary Business Support Scheme (TBESS). In addition the Government has introduced a range of targeted supports to the most vulnerable households, once-off measures and enhancements to social protections schemes.
As Minister, I meet with a range of stakeholders across the energy sector, where affordability of electricity and gas is a priority issue. Officials from my Department have also met with electricity and gas suppliers to discuss a number of topics relevant to the retail electricity and gas markets including pricing, consumer impact and the services offered by suppliers.
Wholesale prices reached peak levels in August of last year, when wholesale gas prices were 706% higher than January 2021, while electricity prices increased by 463%. Although they have since fallen back from their peak, wholesale gas prices still remain higher than their January 2021 level.
The difference in the level and speed of fluctuation in the wholesale market versus that of retail prices demonstrates the supplier hedging strategies and the extent to which these strategies shield consumers against the full extent of this utterly unprecedented international energy market volatility.
Council Regulation (EU) 2022/1854 on an emergency intervention to address high energy prices provides for Member States to introduce a cap on market revenues in the electricity sector and a temporary solidarity contribution based on taxable profits in the fossil-fuel production and refining sectors. Following Government approval of the measures, legislation will be brought before the Oireachtas in the coming weeks. The cap on market revenues will apply for the period December 2022 to June 2023 and the temporary solidarity contribution will apply to the years 2022 and 2023.Estimates of proceeds from the cap on market revenues and the temporary solidarity contribution range from circa €280 to €600 million. It should be noted that these estimates are highly sensitive to wholesale gas prices.
My Department is currently examining options for the use of such funds for possible future supports for consumers
