The electricity and gas retail markets in Ireland operate within a European Union regulatory regime wherein electricity and gas markets are commercial, liberalised, and competitive. 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 this responsibility following the enactment of the Electricity Regulation Act (ERA), 1999. The CRU is accountable to the Oireachtas and not to me as Minister.
As part of its statutory role, the CRU also has consumer protection functions and monitors energy retail markets to ensure that competition continues to develop for the benefit of the consumer. I have recently written to the regulator, requesting that they investigate the pricing strategies in place, taking account of the hedging strategies of the electricity market participants. As part of this investigation, I have asked CRU to ascertain if there have been any market failures, particularly where vulnerable customers are concerned.
Council Regulation (EU) 2022/1854, an emergency intervention to address high energy prices, came into force in October 2022 and seeks to address windfall gains in the energy sector through a temporary solidarity contribution based on taxable profits in the fossil fuel production and refining sector and a cap on market revenues of specific generation technologies in the electricity sector. The cap on market revenues will apply for the period December 2022 to June 2023, and is currently being legislated for through the Energy (Windfall Gains in the Energy Sector) (Cap on Market Revenues) Bill. The temporary solidarity contribution will apply for 2022 and 2023, and was enacted in July through the Energy (Windfall Gains in the Energy Sector) (Temporary Solidarity Contribution) Act 2023.
Deciding how the revenues which result from these changes is spent is a matter for Government, as part of the annual Budget process and in line with the Council Regulation. The proceeds from the Cap on Market Revenues will be used to provide financial supports to households and companies heavily affected by high energy prices. Revenue resulting from the Temporary Solidarity Contribution may also be used to help support climate actions, including investment in renewable energy.
