Dáil Éireann Debate, Thursday - 12 October 2023
20. Deputy Bernard J. Durkan asked the Minister for Enterprise, Trade and Employment the continued efforts of his Department in isolating and identifying the cause of the rising costs of energy and the negative impact on manufacturing, services and distribution sectors; the extent to which efforts continue to provide replacement sources by whatever means, preferably locally sourced; and if he will make a statement on the matter. [44463/23]
View answerI and my Department are extremely conscious of the cost pressures and competitiveness challenges facing businesses as a result of high energy prices. The Government has been consistent in its focus on mitigating the worst of these impacts for businesses in the short term, while investing in the long-term resilience and sustainability of our energy system so that we are not so exposed in future. The Budget, announced on Tuesday, provides a balance of short-term supports and prudent planning for capital investment and integration of renewable energy.
Ireland remains highly dependent on important fossil fuels, and the price of these - determined primarily by the global market supply - are the main driver of petrol, diesel and natural gas prices, and also electricity prices which are still largely determined by the natural gas price notwithstanding that increasing levels of renewable energy are coming on to the grid. While we have seen wholesale market prices for gas and electricity falling in recent months, they remain at levels substantially higher than in 2020. Energy suppliers in Ireland typically hedge energy costs forward over a period of up to 18 months to smooth the effects of gas price volatility. Therefore, as wholesale prices drop there will be a lag before they feed into retail prices for most businesses. While we have seen some price reductions already, I think retailers will have scope for further price reductions and the Government will continue to push for greater price competition in the market. Businesses can shop around to encourage this too.
Since energy prices spiked before and following the Russian invasion of Ukraine, my Department and I have looked to mitigate the worst of these impacts on Irish businesses, with financial supports including the Temporary Business Energy Support Scheme (TBESS), the Ukraine Enterprise Crisis Scheme, and the Business Users Support Scheme for Kerosene (BUSSK). Crucially, we are also helping businesses invest in mitigating their exposure to price volatility, and invest in decarbonisation at the same time. Minister Ryan and I amended the Non-Domestic Microgen Scheme to facilitate access to solar power for businesses while SEAI's Support Scheme for Renewable Heat offers generous grants on heat-pumps and biomass use, and the Green Transition Fund is available for manufacturers through Enterprise Ireland and IDA.
All these interventions are to support businesses immediately, but we also recognise that significant change in our energy system is required to not only provide a stable and price competitive environment but also to meet our continued climate obligations. My Department is preparing an Industrial Strategy for Offshore Wind to maximise the economic benefit to Ireland of the energy transition. The Government's Hydrogen Strategy and forthcoming Biomethane Strategy further demonstrate our commitment and intent to continue producing and using more renewable energy in Ireland, supporting regional employment, and preparing Ireland to be a key destination for low and zero carbon enterprise development.
