Dáil Éireann Debate, Thursday - 15 June 2023
72. Deputy Darren O'Rourke asked the Minister for the Environment, Climate and Communications the action he is taking to ensure savings on the wholesale price of electricity are passed on to customers; the reason that savings have not been passed on to date; the dates on which he has met with energy providers to address this; and if he will make a statement on the matter. [28912/23]
View answerI want to ask the Minister the action he is taking to ensure savings on the wholesale price of electricity are passed on to customers, the reason savings have not been passed on to date, the dates on which he has met energy providers to address this and if he will make a statement on the matter.
My clear message to energy suppliers is that prices for customers should be reduced at the earliest opportunity. Unprecedented increases in energy prices since the outbreak of war in Ukraine have led the Government to take sustained action over the past year to support households and businesses to meet cost-of-living challenges. Direct measures to reduce energy bills included the €800 in total of energy credits between April 2022 and April 2023, reductions in VAT and the temporary business support scheme, TBSS.
Electricity and gas retail markets in Ireland operate within a European regulatory regime wherein these markets are commercial, liberalised and competitive, with the market being overseen by the Commission for the Regulation of Utilities, CRU. As part of its role the CRU is monitoring the implementation of the strengthened consumer protection measures put in place for this winter.
Wholesale energy prices reached peak levels in August of last year, when wholesale gas prices were 706% higher than in January 2021, while wholesale electricity prices increased by 463%. While wholesale gas prices have fallen dramatically and are currently well below the peak values of last year, they are still trading at twice their pre-pandemic levels. Retail gas and electricity prices, based on an estimated annual bill, are 107% higher for gas and 90% for electricity this June compared to June 2021. The difference in the volatility of wholesale and retail prices demonstrates the importance of supplier hedging strategies and the extent to which these strategies shield consumers against the full extent of this unprecedented international energy market volatility.
It is clear the Government has not done enough to protect workers, families or businesses from the high cost of electricity and energy. Wholesale prices have reduced by 57% since last March, but bills increased by 63% in that time and have not reduced since. We have seen the impact of energy costs on businesses. In my county, Meath, Tara Mines issued devastating news for 650 workers earlier this week. Can the Minister tell me what the Government is doing to reduce the energy burden on Tara Mines and other businesses?
There were repeated requests to the Minister to intervene with regard to Tara Mines. A letter from SIPTU was issued to the Minister yesterday, specifically looking for a meeting with him, SIPTU and the Minister for Enterprise, Trade and Employment, Deputy Simon Coveney, early next week. The union will facilitate a group meeting or individual meetings. Has the Minister received that letter? Will he meet the union next week?
I have not received that letter. The Government will approach the issue of Tara Mines in the way that is appropriate, in particular the Ministers for Enterprise, Trade and Employment and Social Protection. We will consider any issue in terms of energy prices. It is not possible for us to intervene directly to change energy price contracts that the company may have. I would like to see the company return to operation. It provides a valuable and important service to the local area, as well as nationally and internationally as one of the largest zinc mines in Europe. We need that material. We will do everything we can to help the company get back to operation and workers to get back to work. The best way of doing that is switching to renewable power, whereby we can bring prices down.
High energy prices in the country are primarily driven by our reliance on fossil fuels. Everything we are doing in government is to switch away from those imported fuels towards the generation of our own power, which will be a lower cost, cleaner and more secure.
In terms of what we are doing, we are working with the European Commission. There is a meeting of the energy Council next week. We need to reform the market and recognise that market structures are not serving their purpose as we switch to a renewable-led world.
I have asked the CRU to review the hedging strategies that apply within the existing Irish market to see whether it is serving us or whether there are other ways in which that can be done so we do not have situations like this. We need to consider whether there are more optimal ways in which such hedging strategies could be deployed.
We see the profits being made by energy companies and the delays time and again in terms of windfall taxes or outright opposition to electricity price caps, and the fact that businesses, workers and families are put to the pin of their collars. Will the Minister meet SIPTU early next week, as it has requested? He has failed to respond to repeated requests. That is a failing on behalf of him and the Government to do everything possible in this case.
Separately, there are reports the Government is looking at a specific intervention, similar to the type of energy support provided for the tech and microchip sectors. I understand in existing schemes there are challenges around the state aid rules. Will the Minister meet SIPTU early next week? Is he looking at a specific scheme to support Tara Mines?
The first thing I have to do early next week is to attend the European Council, which, as I said, is a policy area where we can change, inform and direct the market system and energy prices. I will also work with the Minister, Deputy Coveney, as well as the Minister for Social Protection, because they have a critical role in terms of any supports or other arrangements for any industry. It is something that the Minister for Enterprise, Trade and Employment has a key role in and we will be fully supportive and work in a whole-of-government way to make sure we do everything we can to get those jobs back and the mine back in operation.
