Energy Regulations: Motion (Resumed) [Private Members]
Debate resumed on the following motion:
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.
- (Deputy Richard O'Donoghue)
Fáilte to our guests. I commend the Rural Independent Group on bringing forward this motion. This debate has an all too familiar feel to it. For the past 18 months to two years, Opposition Members have been referring to the lived realities of the people we represent, the fact that the cost of living was exacerbating matters and that the long-standing crisis in provisions like housing, insurance costs and other household costs, such as childcare, was being compounded by soaring energy costs. The story is familiar. We bring forward solutions, proposals and those lived realities and a Green Party Minister comes before the House and basically says everyone is wrong, while Fianna Fáil and Fine Gael Deputies are in hiding. Then, maybe six months later, Government will take some part of the Opposition proposals and meekly, half-heartedly make some changes. It is always too little, too late.
We are in November and thanks be to God it has been milder than usual. Some will say that is not a good thing because it is a sign of the climate change we face. That is true but thank God from the perspective of many people who I deal with on a weekly basis. They are in dread of a cold spell and what it will mean for their electricity costs, and unsure whether they will be able to heat their home or if doing so will be at the expense of feeding their family.
Again, a set of proposals have been brought to the Minister of State. Again, Deputy O'Rourke has set out what needs to be done and, again, the Minister of State has outlined that he has virtually no intention of taking on board what has been asked of him, namely, facing up to the giant corporate energy companies who are fleecing the Minister of State and taking him and his Government for a ride. The Government has been defending them and going to Europe to fight measures that would force them to pay additional taxes or to decouple their prices. I implore the Government to change tack and start acting on behalf of workers and families, as opposed to energy companies.
Last weekend, hundreds of people came onto the streets of Cork city to call on the Government to take action. So far, it has not done enough and people are suffering in this cost-of-living crisis. Their voice and message were clear. People are sick of rising fuel and energy prices and the Government must do more. Caitriona Twomey from Cork Penny Dinners spoke and outlined how that charity is feeding 1,000 people per day in Cork. The Society of St. Vincent de Paul said it is receiving 800 phone calls per day for help. One in three people lives in fuel poverty.
Is this not a clear message to the Minister of State and the Government that they are not doing enough?
Now there is the potential of hundreds, if not thousands, of layoffs in the tech sector. Many of these workers are just struggling to survive at the moment. They could be pushed into poverty and towards using charities such as the Society of St. Vincent de Paul, Cork Penny Dinners and others. The Tánaiste's response is just to shrug his shoulders. It was the same shrug he gave in respect of the Debenhams workers and when we spoke about people who are on prepay meters, family carers, foster carers and pensioners. Where is the support? Where do matters stand as we head towards Christmas? The weather is getting colder. Parents will have children at home for much longer. The worry is how they will heat their homes and how they will provide the additional meals that will be needed. There is not enough in what the Government has put forward for those people. Christmas is meant to be a time for families when people can come together and enjoy each others company and the season. For many, this Christmas will not be a happy time.
The Government needs to do more. Energy companies are making huge profits and the Government is sitting idly by.
I also welcome the distinguished guests. Earlier this week I spoke to the head of the South Kerry Development Partnership about the work it does in the rural social schemes and Tús schemes in south Kerry. I refer here to care of the elderly, social farming, the rural men's officer, DJ Moran, whom it employs, the maintenance of sports fields and support for meals on wheels. It assists 200 projects in the area. However, the people working on those schemes only receive an extra €19 on top of their social welfare. That is supposed to help them with their travel expenses and fuel and its increased price. According to the latest CSO figures, the CPI rose by 9.2% from October last year to October this year. The price of water, gas and other fuels have risen by nearly 28% over the same period. More alarmingly, consumer prices rose by 1.6% between September and October of this year while water, electricity and gas rose by nearly 9% in that time. I do not need to tell the House what a 10% increase, month on month, over the course of the year will do to people. I have also heard from local businesses that have seen their bills increase by these amounts - sometimes tripling or even quadrupling - in that time. The equation for these small businesses is simple: get help or fold. A capping of electricity prices at previous levels is what they need.
We also need a massive investment in renewables because the latter are cheaper and more stable. We are currently far too exposed to energy shocks. Any transition must be fair, however. The regulations and laws have a part to play, but correcting economic inequality cannot be done at the stroke of a pen. That is why measures such as the prioritising of retrofitting for those at risk of energy poverty are so crucial. The Government needs to act. It needs to do more. It needs to cap electricity prices. What it has done so far is a mistake. It needs to act to help the people who work around the Ring of Kerry and the small businesses.
We can see by the number of motions on energy prices and energy security in recent months that this is very much an issue affecting the vast majority of our constituents. This morning, we have yet another motion on energy prices. It highlights the cost that households are paying but also the lack of action by the Government as well as the market structure that links gas prices with the price of electricity, not to mention the profits being made by energy companies and the lack of windfall tax. For more than a year, Sinn Féin has called on the Government to decouple the price of gas from electricity prices. We can produce electricity from wind and solar at a relatively low price. The current system means that electricity is sold at the same rate as gas-generated electricity. This is ridiculous and makes no sense. We have seen the usual Government flip-flopping on the matter. It has swung from vigorous opposition to it to thinking it was a bad idea to kind of half supporting it. That is not good enough. Sinn Féin has repeatedly raised this matter with the Taoiseach and the Minister for Environment, Climate and Communications. Reform is needed. It will make a difference in people's pockets. Why does the Government sit on its hands? Why has it prioritised the profits of energy companies over the interests of ordinary people, workers, families and, in particular, our older people? It is for the same reason that it has refused to introduce a windfall tax on energy companies that are profiteering from the war in Ukraine and the current crisis relating to energy prices. The EU has agreed a way forward and the Government must act immediately. Because of the nature of the market it could take months for the price reductions to be passed on to customers. We need to strengthen the powers of the energy regulator, particularly around standing charges. What we really need is a Government that actually cares how its policies affect workers and families. Sinn Féin will continue to hold this Government to account until we get the chance to be in office.
I commend the Rural Independent Group on tabling the motion. I appreciate the opportunity to speak on this important matter, particularly as the Government's delay in taking meaningful action to address the challenges that continue to be faced by households and businesses is apparent both here and at the European Council. One action that could have a meaningful impact on the dreaded electricity bills coming in people's doors would be to decouple electricity prices from those obtaining in the gas market. This is something that was proposed by numerous countries at EU level and has been repeatedly raised by Sinn Féin for over a year yet the Government actually signed up to a statement confirming its opposition to decoupling. The reversal of the decision here by the Minister for Environment, Climate and Communications is welcome but questions over the Government's ability or wiliness to effectively deal with this do not give one faith in their ability to make the right calls for the people.
The windfall tax is another area where the Government is dragging its feet. In September, the Council of Energy Ministers agreed a resolution to implement a windfall tax. The most that we have had from the Government on this is a statement by the Minister that his Department is working with other Departments, Government agencies and stakeholders to implement the regulation. I have said time and again since being elected that there is a real sense that this Government does not accept the urgent need to accept matters that are immediately affecting people and businesses. I find myself saying that again today while families are choosing between heating and eating and while businesses are uncertain about the future. Those are the ones that have not had to close their doors or let people go. It is really not good enough.
What about standing charges? Some energy companies have increased them by €300 in the past year alone. One supplier now charges up to €700 a year. This is another way of fleecing an already hard-pressed public. What has the Government done? Nothing. The CRU states that it does not have the remit under legislation to regulate standing charges. Where does the Government stand on this? It is staying silent while people struggle. We need legislation to give the CRU the power to regulate standing charges. The Government has become shameless in its support for the status quo rather than taking measures to deal with the challenges people face. Its poor response to the interests of the Irish people is unjustifiable.
We are dealing with another motion about how things are in the real world in the context of the cost of energy. Whether it is individuals or businesses, we all know that we have been inundated in respect of this matter. Some of my colleagues spoke about the weakness of the CRU's remit and powers with regard to standing charges. There are huge anomalies. Many of us will have dealt with issues around communal or district heating systems that are fed by gas and the massive costs that people are facing as a result. I have had many interactions with the Minister of State, the Minister and anyone else who will listen in order to secure a solution for my constituents in Carlinn Hall. There was an anomaly there, like many instances before, to the effect that the CRU is not responsible. While some of this may be rectified, we need to do this as soon as possible and ensure that we have all the tools necessary to deal with the particular issues before our people now.
The Government was resolutely opposed to decoupling gas and electricity prices. There has been a change in European policy. We have seen that around caps and windfall taxes. On some level we might say that we are unsure if the European Union is quite as imaginative or creative as it needs to be.
That is accepting the issues that exist as regards the electricity markets. We are aware of the realities the Minister is dealing with, including hedging. At every point, there is someone in the market seeking to make money. That is capitalism. I suppose that, at some level, it is unfettered, unchecked capitalism. We are all aware of the huge profits made by some of the energy suppliers internationally. We really need to get down to the crux of the matter so we can reduce the costs for the people as best we can. We know what needs to be done for businesses.
I have said before that I am shocked at some level - call it the western world, the European Union or whatever. We all know the crisis we are in because of the Russian invasion of Ukraine and its destabilising impact, particularly in the context of energy supply. However, one of the weapons of hybrid war that Vladimir Putin has is the possibility of considerable contagion and impacts across Europe, including Ireland, because of the high cost of energy. We have to rectify this.
As I have said before, we need to examine the temporary business energy support scheme in the context of mitigating the problems associated with communal heating systems. I will be raising this matter with the Minister for Finance later today. We really need to take action. We are not doing enough and not acting quickly enough.
I am glad to speak on this motion. We are aware that energy prices have risen across Europe. That is not in question, but there are particular factors at play in Ireland. Bloomberg is reporting that the biggest monthly gains in electricity costs are in Dublin, where power rates have climbed by 44%. Similarly, the costs of gas and other fuels are going up and up. We can no doubt attribute this anomaly to climate change. While the current unseasonably warm weather has a sinister cause, it has been positive in that fewer people in Ireland have had to turn on the heating so far. However, as we see a drop in temperature, even today, rising costs will have an even greater impact on households. We are all hearing already about the fear of many families and individuals as they face the winter ahead and see prices continuing to rise.
On Saturday, I addressed a protest organised by the Cost of Living Coalition in Rathmines in my constituency. I spoke to students, older people, renters and many others. They described the increasingly narrow margins they experience to get by week after week. This is a genuine issue across the country.
Undoubtedly, the terrible war being waged by Russia against Ukraine has had a significant effect on energy prices across Europe and worldwide. However, it feels as if we are being held to ransom here in Ireland by energy giants and market speculators. While households here are resilient and looking to where they can cut costs, and cut energy consumption with a climate focus, we can see it is not additional discretionary spending that drives hardship in Ireland; rather, it is the cost of basic necessities that does so. I include the costs of housing, rent, childcare and, of course, energy. Even though we all seek to reduce energy consumption, prices are still rising drastically. We are all hearing about these issues. There are many people who cannot manage without retaining their heating and energy-use levels.
Vulnerability to market factors has contributed to the hardship people are in, and a change of system and radical measures are now needed to help, not the sort of Band-Aid solutions or half measures we saw introduced in budget 2023. While one-off measures such as the lump-sum payments assisted people for a while, their initial shine is starting to wear off. Once energy credits and lump-sum payments are used up, prices will continue to rise. Social protection recipients are receiving payments below the rate of inflation, and poverty and deprivation are likely to increase as temperatures drop. Therefore, it is past time that we saw an end to the undue deference to profit and profit-driven companies when it comes to securing the well-being of our people. A profit motive is fundamentally inconsistent with supporting people through periods such as this. We need to see a strengthening of the role of the State and the intervention of the State in the markets.
To be constructive, what did we propose to avoid some of these problems and reduce reliance on the private sector and the market? Labour, in the budget, would have implemented a three-pronged approach to the energy crisis, with a windfall tax on excess profits, a cap on energy prices and changes to the fuel allowance and other energy supports. We have no hesitation in pushing further for the principle of a windfall tax on profits and a solidarity tax. We conservatively estimated that our iteration of a windfall levy would yield €600 million in 2022, rising to €800 million in 2023. The cap on energy prices has been resisted by the Government, which has said it is a complex and dynamic measure. It certainly is but we have seen many EU countries taking this approach. We pushed for the so-called Iberian model, introduced by socialist governments in Spain and Portugal. It has provided a model for limiting the price of gas and electricity production and, in effect, subsidising gas generators. Spain and Portugal have adopted that model since June and have reduced bills for Spanish and Portuguese households by between 15% and 20%.
We have called for the temporary nationalisation of the Corrib gas field. I renew that call today in order that the price we pay for our domestic gas supply will be set at the cost of production, plus a margin for the operator, rather than having it set by the international market as at present. This does not entail a cap on fuel prices but such a measure would serve to regulate and reduce the cost for households. It can be achieved using existing legislation. As I have stated repeatedly in the House, this legislation was invoked by previous Governments in the 1970s during the fuel crisis.
Alongside these measures, we would have put in place a range of targeted supports through budget 2023 to help cover the costs of the over 1 million households we know to be at risk of energy poverty. We would have created a refundable carbon tax credit targeted at ordinary working families in poorly insulated homes, and we would also have ensured that the credit would be worth €800 in total to low- and middle-income workers. Particularly for families who remain reliant on solid fuel and home heating oil in advance of retrofitting measures, this would have made a significant difference.
It is hard to escape the conclusion, without these targeted measures, that a mini budget may well be required in the new year to account for the increasing inflation rate and increasing prices, particularly of energy and fuel. At the very least, the Government could have taken other measures that might have avoided that necessity. An example would be a clawback mechanism of some sort for our existing system of energy credits, such as the withdrawal of income tax credits from those earning €100,000, which we also called for. Another example would involve the application of a levy equivalent to the electricity credit, modelled on the previous non-principal private residence charge, to holiday and vacant homes to prevent those with multiple properties from benefiting from universal measures.
We in Labour staunchly advocate universal measures, where necessary and of benefit, but this is a situation where targeting should have taken place. No one should benefit disproportionately when some are suffering so disproportionately. When I speak to individuals and groups who are disproportionately harmed, I want to restate our call for more effective reliefs for people who consume energy on a pay-as-you-go basis. We are all conscious that they are particularly affected. People on lower incomes are overrepresented in this group and are least insulated from price hikes. As with the eviction Bill, there should be a guarantee set in stone so no one’s lights or power will be switched off because they cannot afford to pay this winter.
Another group struggling this winter and from whom I have heard in many cases comprises those in district heating schemes. The Minister will know that this group pays for energy at the commercial rate. I heard from an individual in my constituency whose bill has risen by nearly 600%, which is an extraordinary price hike. I am aware that there are others living in hundreds of apartment blocks around the country who are also affected. I submitted a parliamentary question very recently on this. In response, the Minister mentioned a steering group that is to report on the matter. This is an unsatisfactory response for those facing bills of in excess of €1,000 this winter. We need to see more urgent action taken.
We are also calling on the Government to examine, as a matter of urgency, the regulation of energy companies' use of standing charges to offset the artificial price reduction brought about by the energy credit scheme. We know some suppliers are now charging nearly €1,000 per year in standing charges regardless of how much energy households or businesses use. Hiking charges is anathema to the message we should be sending, considering that we are asking people to reduce their use of unnecessary energy and switch to renewable sources. Therefore, I ask the Minister to revisit the Government’s decision on this.
All of this comes against a backdrop of increasingly visible effects of climate change, on which there is an ongoing debate at COP27 in Egypt, yet Ireland still has what are among the highest emissions per person. Our system remains highly reliant on fossil fuel energy, so we need to see radical measures introduced to ensure a move to renewables and the ramping up of actions necessary to combat climate change.
I look forward to continuing that aspect of the debate during the debate on the new climate action plan.
I thank the Rural Independent Group for bringing this motion forward. I accept that we have spoken at considerable length about the energy crisis in the past year, but it is important that we continue to do so because many people are still being left behind and the future for many in the community is very uncertain as the energy crisis continues. Therefore, it is a very important issue to discuss.
I do not want to repeat previous contributions that I made on the issue, so today I wish to speak about what I see as the fundamental flaws in the Government's approach to dealing with the energy crisis. The first point is that the Government relies on the market, not only to address the climate crisis that we are in, but also the energy crisis. There are major issues with that because relying on the market it is too slow, too expensive and it will not result in a just transition. Essentially, the market will deal with people's needs on a monetary basis and will not take into account fairness and the basic needs of people to be supported and cared for. That is a job for the Government. Unfortunately, the Government is not taking the role seriously. It relies far too much on the market as we try to deal with the various crises.
The second point is that the Government tends to wait for someone else to lead. In this instance, when we talk about the windfall tax or the decoupling of energy, the Government waits for Europe and other countries to lead and then Ireland follows. When it comes to this issue, we need Ireland and the Government to be leaders and to fight for the people we represent. I understand that in some instances it makes more sense in a European-wide market that we work in a collaborative fashion, but there are many things the Government can do to lead on this issue and it has not done so. The Social Democrats has been raising the windfall tax with the Government for a year, yet it has waited for Europe to take the lead on it. As a result, it will be months before the issue is resolved, and similarly with market reform. Spain and Portugal took the lead and represented their people because they understood that their two countries were not quite as integrated into the European energy market as others, which in fact is similar to Ireland. They fought to benefit their countries. Unfortunately, we did not see that with Ireland, which sat back and waited for Europe to take the lead.
The third point is that the Government deals with issues in a short-term fashion. The Minister of State outlined the one-off measures that have been introduced, but the reality is that this is not a one-off situation. The energy crisis is with us this winter and it will be with us next winter. Many analysts believe it will be with us for many winters to come. That is also the case with climate change and the need for climate action. The Government's short-term measures are not targeted enough and they are not matching the money to the people that need it. They are also costly because ultimately it is a very costly exercise, but because it is not targeted it means the Government is spending a lot of money on these measures. Again, that is not money that is necessarily going to be available next year. Corporation tax receipts will not be replicated next year and there is a risk that we will go into recession. We are facing a very different economic environment next year and we do not know what will happen globally and with the war in Ukraine. While the one-off measures have given the Government a little bit of breathing space and may have assisted some people in the current month, it will not give it much extra time.
Ironically, the fact that we are having such a mild winter has assisted the Government and therefore the impact we are seeing from climate change is helping at the moment. However, this is something the Government will not be able to ignore for much longer. What the Social Democrats wants to see from the Government is it making homes resilient to global energy shocks and climate shocks and for people to be able to rely on their own capacity to manage energy costs. The Minister of State is no doubt thinking about all the money the Government is putting into retrofitting, but the first point I would make in that regard is that when we look at the amount of money it has put into one-off measures – a budget of €2.4 billion – could he imagine what kinds of households and communities we would be living in if the money had been earmarked to build in resilience and to assist two and a half or three years ago when the Government came to power? It would be incredible. Let us compare that with the additional €14 million for solar energy. There is a huge disparity there. The Government is not putting enough focus on making homes resilient.
I will not only be critical of the Government; I will also offer some solutions. I will keep banging on about these solutions because I want the Government to listen. Its current focus should not just be on retrofitting, as that takes a long time and is costly. There is a much quicker way to help people and ensure they get assistance in the medium term. That is through the implementation of solar energy and ensuring that it is made available to as many households and businesses as possible in this country so they can generate their own energy. Solar energy is practical, possible and quick to do. It would build the level of resilience we need within our system and communities. It would not only help with the climate crisis and reduce energy costs, but it would also help with the grid, which is very vulnerable currently and is incapable of dealing with the level of electricity demand the Government has overseen in recent years.
It is a win-win situation if we start to develop solar energy. The difficulty is that it will not be done if we rely on corporations and businesses to do it. This needs major State intervention. The Government must drive a widescale solar investment programme. That means the Government must purchase solar panels. It needs to go to companies in Europe and agree multimillion euro contracts for solar panels, because that is the cheapest and also the quickest way to do it. We would completely overcome any delays in the supply chain by doing it like that. I have spoken to some experts who say it would save 50% to 60% of the cost. That is how it should be done. Once the Government has the solar panels, it will need to put them on people's homes fast. That means going in and doing it by means of State teams of solar experts going around and putting the infrastructure on everybody's roofs. That could be done very quickly. It takes half a day or a day to put it on a roof. By doing that, we would save homes 40% on their energy costs and make them resilient. It would mean the Government would not need to put €2.4 billion into people's pockets next year just to help them get over the winter. It is the most practical way to deal with it. I ask the Government to take the suggestion on board and get it implemented.
I wish to share time with Deputy Bríd Smith.
Is that agreed? Agreed. Is that three minutes and five minutes?
We will see how it goes. I welcome the motion tabled by the Rural Independent Group. It is a good motion which touches on many issues concerning energy. One of the issues I wish to reference relates to the proliferation of data centres in the country. I refer specifically to the South Dublin County Council area where, currently, there are close to 50 data centres. It has the highest concentration of data centres in the country. The facts are stark in regard to data centres not only in this county council area but elsewhere in the State. Currently, data centres use 14% to 15% of all electricity demand but in eight years' time, that will increase to 30%. It is an incredibly stark figure when we think that one third of electricity demand will come from one type of entity in the State, namely, data centres. We are not against data centres per se, but we must question the social use of data centres given their proliferation.
With the help of my party colleague Councillor Madeleine Johansson, South Dublin County Council voted to put a moratorium on all data centres in the council area between now and 2028. That vote has been overturned by the Minister of State, Deputy Burke, which is completely wrong. It is against local democracy. Councillors should have a say. They should have a voice with respect to data centres being concentrated in their area.
The facts are incredible. Around the world, data centres typically account for up to 3% or 4% of electricity demand. As I said, in Ireland it is 15% and growing. What could happen is that, because data centres are using so much of the resource, a sudden shock in demand will cause households to be in the dark. There is such a concentration of electricity for data centres and it is not sustainable. As a member of the Green Party, surely the Minister of State agrees this is not a sustainable model of electricity supply and demand? I ask him to relay to his Government colleagues that local democracy should be upheld. There should be a moratorium on all data centres, not only in South Dublin County Council but in the State as a whole.
I welcome this motion from the Rural Independent Group. It is refreshingly progressive and we will fully support it. The motion is unusual, coming from the quarter it does, in that it does not promote fossil fuels, LNG, Barryroe Offshore Energy or anything else. They are completely absent from it and I am delighted to see that because it is progressive. The motion calls for a reduction in the use of electricity by data centres, which Deputy Kenny has just gone into very thoroughly.
It also covers things like putting a cap on the revenue of the energy companies and details clearly how the profits of the energy companies have skyrocketed out of control, for which there is no justification. The motion also calls for price controls, which is something the Government must look at. It does not make sense. All the previous speakers called for intervention in the market, the market that has failed and that does not work anymore. It is just the obstinacy of the Government preventing us from looking at making an intervention and putting a cap on energy prices.
The other thing the motion does is call strongly for the implementation of a profit solidarity tax. I ask the Minister of State directly when the Government is going to come back to us and talk about this. It was mooted months ago and the Taoiseach said the Government would look at it. Europe is supposed to be looking at a solidarity tax but it is lying there in abeyance while the profits increase.
I will speak a little about what People Before Profit would do in the energy sector. We would do all the above, and agree entirely with the motion from the Rural Independent Group, but we also believe we must renationalise the energy sector and have a Bill coming forward through the Dáil on same. I will go over the arguments again. In the early years of this State, when we had very little in the way of resources and finances coming into the country, we made a decision as a State that there were certain things we had to do. One was to create a housing stock and some kind of a health service but, crucially, to feed into that, we had to create an energy sector. Ardnacrusha and the creation of the ESB and Bord na Móna were attempts by the State to have a not-for-profit mandate electricity system that would turn on the lights and power the entire State, and so they did. The State did this in a progressive way by employing people in decent jobs, giving apprenticeships, keeping the lights on and providing power to every home and business in the country at a very reasonable rate. That reasonable rate was maintained because the ESB in particular had a not-for-profit mandate right up to 2001, when that was changed. The energy sector was deregulated, and thrown open to competition in the open market. The not-for-profit mandate was removed and now we have one of the highest energy costs to the consumer in the entire EU.
People Before Profit believes the renationalisation of the energy sector is the way to go and the simple way to do that is to remove from the ESB the mandate that it must return a profit. All the rest of the businesses competing for profits would fade off into the background, and if they did not, the State could buy them and have one company that produced the electricity and delivered it to homes and businesses throughout the country. The other advantage of that in the current climate is it would take over the production of all offshore energy and all renewable energy power. That would mean renewable energy, which is a natural resource, would not be used as a for-profit tool by these greedy energy companies but would rather be a resource for the people.
I heard other Members refer to this earlier, but the Cost of Living Coalition has been an important tool in putting these arguments to ordinary people, trade unions, pensioners and students and for bringing them together to have a loud voice that tells the Government we will not tolerate this. I note there have been general strikes and protests across Europe over the energy crisis and the cost of living. The cost-of-living crisis has not gone away for us here and the winter will be bitter and cold. Post Christmas, people are really going to feel the pinch. To that end, we will be out marching on the question of housing on 26 November with all the groups I mentioned. This campaign will continue right into the new year until this Government begins to listen.
Just before the Minister of State, Deputy Smyth, leaves, what I have to say on this subject is especially pertinent to him as a Green Party Minister of State. I thank the Rural Independent Group for bringing this to the floor so we have a chance to discuss it again.
The buzzwords in a debate like this are "climate crisis" and "climate urgency", but these have led to the cost of living and the different actions, or lack of action by Government, that have led to a cost-of-living crisis. There are many solutions that go with the aforementioned buzzwords like a reduction in emissions or the cost of the fines we pay for not reducing emissions. There is the cost of reduction in farming through convergence, for example. This and other measures led to an increased cost of living, and that is where people are suffering. We must tackle the emergency but we have to be real. All the figures we hear relate to 2030 or 2050 but what about today and what we can do today? That is what people are interested in primarily.
If we want to reduce carbon emissions, there are carbon-neutral schemes and reduction targets we can use. I do not just mean electric cars. We can look to using hydrotreated vegetable oil, HVO, as a replacement for fossil fuel diesel immediately. The figures on the amount of diesel cars and engines we have in the country are astounding. Some 36% of cars, over 80,000 tractors and upwards of 110,000 heavy goods vehicles, HGVs, and light commercial vehicles operate on diesel. There are also diggers, generators and other types of commercial equipment. HVO could be used to fuel them today as it is interchangeable without any need for mechanical alteration to a diesel engine. There is not even any change required at the petrol pumps as all we need is a sign that says "HVO". The reduction in carbon emissions is 90% in the particulate emissions when HVO is used. There is a reduction in NOx of upwards of 30%.
It is astounding to think that for five years running, sectoral interests such as the Irish Road Haulage Association have requested a measure from Government in the budget that sees HVO treated differently as a green fuel over and above diesel. The current position is that excise duties are applied to HVO in the very same amount as they are to diesel. We hear every day that diesel is the fuel that is causing the climate emergency and causing our carbon emissions. What we do not hear is that we have an alternative that would save 90% over diesel, which is a tenfold benefit. We do not even hear about it. The reason it is not being used is that when the same excise is applied to HVO as it is to diesel, it actually makes it 20 cent per litre dearer than diesel. There is, therefore, no cost benefit to anybody.
There is a massive environmental benefit to the whole island of Ireland and to people in general, particularly in built-up areas and cities such as Dublin. The Environmental Protection Agency, EPA, said the biggest offender is the Dublin Port area and that static traffic is creating NOx emissions, which are bad for lung health. With all the buzzwords like climate emergency and climate crisis, however, we still do not see Government coming up with the incentive required.
The use of HVO provides the ability for farmers to replace the sugar beet industry. An EU directive was brought in to say we can only plant 7% of our hectarage for oilseed rape for the production of food or otherwise or for the production of HVO. It does not matter; the figure is 7%. That would equate to 33,000 ha of Ireland’s landmass. It could be refined here on the island. It would mean we would provide energy security by growing and refining HVO to the tune of 20%. We say every day that we do not have energy security. Our gasfields are about to close, but we will still have them until 2030. We could have this next spring. We could tell farmers the incentive is that this a carbon-efficient rotation crop. It will do wonders for carbon sequestering. The farmers do not get the benefit of that, mind you, but that is another benefit the Government would have. Currently, Government uses the farmers' sequestering of carbon for its own benefit. It is time the Government gave back and admitted we have an alternative, but we are not providing the proper incentives in order that it can be utilised. That is a great shame.
What we are seeing here is Government telling us it cannot reduce excise when we know it can. It does not have the will to do it. Government should be providing greening schemes that do not penalise and reduce farmers' production. We should be growing 7% of our hectares under oilseed rape on the basis of refining that into HVO, which is interchangeable for the hundreds of thousands of vehicles I just named, not least the 110,000 trucks and light commercial vehicles on our roads. It should be mandatory for anybody entering the city to use HVO so that we do not get the build-up of NOx emissions. That can only be done if there is an incentive that makes it cost effective, however. From what I outlined, any such scheme would be cost neutral. It is certainly environmentally beneficial. I have not heard from Government why this is not being done. In his answer to this motion, perhaps the Minister of State can outline that. I can see no good reason we would not try to save 90% of emissions and why we would not reduce NOx emissions by 30%. Let me tell the Minister of State that doing so actually reduces the use of AdBlue, of which nobody really knows what the effects will be in the future.
This is a proposal that can be instigated tomorrow. The farmers only need to be given notice to grow it next spring. There is no reason not to and, if there is, I expect the Minister of State to outline it. I believe this is a perfectly good and environmentally friendly proposal. If it cannot be done, I ask the Minister of State to tell us why.
Before we move on, the speaker from the Independent Group has not arrived yet. I propose we go to the Minister of State. If the speaker comes in, with agreement, we can allow the Deputy in before Deputy Mattie McGrath. Is that agreed? Agreed.
I thank the Deputies for raising these important matters and allowing us time to discuss them today. As noted previously, the Government is keenly aware of the growing pressures this places on families and businesses. Just like other European member states, Ireland is acutely feeling the effects of the current energy crisis. It is a matter of serious concern to Government that rising electricity and gas prices caused by international conditions are putting increased pressure on consumers. Protecting those in a more vulnerable economic position and at risk of energy poverty is a top priority.
Intensive work is now under way to implement the recent Council of the European Union regulation on an emergency intervention to address high energy prices, which includes a temporary revenue cap on electricity producers and a temporary solidarity contribution on excess profits from activities in the fossil fuel sector. The proceeds from this temporary solidarity contribution and the market cap will go towards financial supports to consumers heavily impacted by soaring energy prices.
In terms of the overall cost of living, a co-ordinated whole-of-government response is under way. This holistic approach is essential to tackling this issue. As previously outlined, the Government acted throughout 2022 in response to rising energy prices and introduced a suite of measures worth €2.4 billion to assist households in their energy costs. Budget 2023 provides a further €2.5 billion in one-off measures for households. Any major interference in the energy market would need to be carefully considered to avoid potentially disrupting a market that is already facing significant challenges, thereby exposing the Exchequer and, ultimately, the taxpayer to potentially unquantifiable costs.
In this regard, direct assistance to customers such as the domestic electricity payment and targeted measures like the fuel allowance are a better approach. As has been highlighted, Government has long provided and will continue to provide practical supports for those struggling with their energy costs. Government continues to allocate significant funding to these practical supports via the welfare system and through energy efficiency grants and retrofitting. Some of the details I wish to outline include the best long-term approaches for Ireland to insulate customers from volatility in international wholesale energy markets, which are to invest in energy efficiency and renewable energy, expand interconnection with European and neighbouring markets and deepen the internal market in energy.
In terms of the overall cost of living, it is vital to stress that a co-ordinated whole-of-government response is being followed, which is essential to tackling this issue. The forthcoming energy poverty action plan will set out a range of measures to be implemented this winter as well as key longer-term measures to ensure those least able to afford increased energy costs are supported and protected. This work is being undertaken by a steering group consisting of relevant Departments and agencies. This area of work also includes interactions with the NGO sector.
In response to rising energy prices, the Government has already taken action through 2022 and introduced a suite of measures worth € 2.4 billion to assist households in their energy costs. Throughout 2020, the Government has taken action in response to rising prices for a variety of measures, including the electricity costs emergency benefit payment, which saw 99% of domestic electricity accounts being credited with the electricity cost emergency benefit payments of €176, excluding VAT. The total cost of that scheme was €377 million. This was part of a €505 million package of measures that was put in place to address increased costs of living, which included increases in the fuel allowance and a reduction of VAT on electricity and gas bills from 13.5% to 9%. A €320 million measure was introduced to reduce excise duties on petrol, diesel and marked gas oil temporarily, which cut excise by 20 cent per litre on petrol and 15 cent per litre on diesel.
The Government has continued to take action. Budget 2023 provides a further €2.5 billion in one-off measures for households. The budget package includes a new electricity cost emergency benefit scheme, which this House passed last month and has now been signed into law by the President.
The scheme will credit €550.47 exclusive of VAT to each domestic electricity account in three payments in each of the following billing periods: November-December 2022, January-February 2023 and March-April 2023. The estimated cost of the scheme is €1.2 billion. The scheme will apply to domestic electricity accounts using their unique MPRN to allow the payment to be credited to individual bills automatically without the need for application or approval, including pay-as-you-go meters. Therefore the payments will help both bill-pay and pay-as-you-go customers with their electricity costs. The measures introduced under budget 2023 also include a €400 lump-sum payment to fuel allowance recipients in addition to the payment of €33 per week for 28 weeks. That is a total of €924 each year. There is a €200 lump-sum payment for pensioners and people with a disability getting the living alone increase; a €500 cost-of-living lump-sum payment to all families getting a working family payment; a double payment of child benefit to support all families with children; a €500 cost-of-living payment for people receiving a carer's support grant, which will be paid in November; a €500 lump-sum cost-of-living disability support grant to be paid to all people receiving a long-term disability payment; and a €500 rent tax credit to tenants. Budget 2023 also increased the total allocation to the SEAI by 36%, up to €480 million.
The Government is acutely aware of the importance of protecting jobs in order to protect families during this energy crisis. This has been key in the design of the new temporary business energy support scheme, which will provide up to €10,000 per business per month until spring 2023 to help with rising energy costs. The scheme will support eligible companies, covering 40% of the increase in their energy bills. These measures are in addition to Government supports such as the household benefits package, a set of allowances which help with the cost of running a household. This includes allowances towards covering electricity or gas costs and recipients are paid €35 per month. Under the supplementary welfare allowance scheme, a special heating supplement may be paid to assist people in certain circumstances. Exceptional needs payments can be made to help meet an essential one-off cost which an applicant is unable to meet from his or her own resources. The ESRI has found that the one-off measures announced as part of budget 2023 would insulate most households from rising prices this winter.
As I have outlined, the Government has long provided and will continue to provide practical supports for those struggling with their energy costs. The Government continues to allocate significant funding to these practical supports via the welfare system and through the energy efficiency grants.
We put down this motion in good faith and I am delighted to see the support it has got. Ar an gcéad dul síos, ba mhaith liom mo bhuíochas a ghabháil don iar-Sheanadóir Brian Ó Domhnaill agus do Mhairead san oifig for their research on this. It is quite a basic, simple, honest-to-God motion that ordinary people would recommend. I mean no disrespect to the Minister of State's script that he read out, nor to the Minister of State, Deputy Ossian Smyth's script. As usual the Minister, Deputy Eamon Ryan is not here. Where is he? He is at COP27 in Egypt. Some 400 private jets flew in there and the Government has the audacity to tell people to tighten their belts. I remember the late Charles Haughey with the Charvet shirts telling people to tighten their belts. There is a sense of déja vu; we are here again. This time people are crippled and they are on their knees, begging on life support.
The Minister of State, Deputy Ossian Smyth is gone but I was delighted he was so welcoming of our motion. We are common-sense people. We are not climate deniers. The issue that the Minister of State, Deputy Smyth, and others seem to have with us is that we want to keep the lights on here in the interim until we have all the wind that is blowing. At the risk of repeating ourselves and what Deputy O'Donoghue said at the outset, T.K. Whitaker, God rest him, the forefathers of this country and the visionaries had such a passion and a view. I am not an idealist as regards having systems nationalised but we may have to nationalise the power companies because they are not playing ball. Regardless of whether it is a result of pressure from us or our motion, I am glad to see SSE Airtricity has announced today that it will forgo all profits for the rest of the year. That is what we need. We need more sticks and less of the codology. We need more cop on instead of COP summits. The children who were in the Gallery earlier, some are still here, were laughing at us because we cannot get this.
We are talking about wind and the big plans that are made that in ten years' time, we are going to be all wind, offshore and everything else. Where is it? The wind blows, as Deputy O'Donoghue said, and it does not cost anything for the wind to blow. Where is the regulator? We met the most senior executives of the ESB last week and we learned a lot from them. It is a bad day when we do not learn something. They told us they were waiting for the regulator because this statutory instrument had been passed in Europe. Why are we the laggards always? When it is something that will help the people we are last to do it but if it is something that will penalise the people, we are jumping up and down to do it and to add three or four more statutory instruments to it. Some 96% of all the wind energy produced in Ireland is priced at the same price as gas, even though it is produced at a fraction of the cost. Does the Government get that? It is all bundled in when the ESB or whoever goes out to buy. It is all in there and we are paying that grubby tax on it even though it is cleanly produced.
Rip-off Ireland is alive and well in the Government. The regulator is asleep, the energy companies are gouging and no one says a word; why would they? The Government allowed the banks to walk away with billions, bailed them out. It allowed all the big companies put in the data centres. What is big is wonderful as far as the Government is concerned. The Ministers would be great men building snowmen. They would go raving mad altogether at the biggest one, like children with sweets in a confectionary shop. That is what the Government is like while the people perish.
Was it Marie Antoinette who said "let them eat cake"? We had lectures this morning for all public buildings not to have a kettle in their offices, not to boil a kettle. Are we going to go back to the beart easnach, the women carrying it tied to their backs with the shawl and they made a little tripod, brought a billy can of water and boiled it? Are we going to do that out in the yard of public offices here? Would the Government cop itself on instead of going to COP26 or 27, whatever it is? It is for a show and glory and to be seen to be better than anybody else. We are small fish in a big pond and we should behave with respect for our nation and not be trying to keep up with all the big boys. We will drive our people into penury to be as good as what they are out there when we see what is happening in China and Germany. We have been talking this morning about what is going on in Spain and Italy where they have implemented this regulation. We will not implement it at all. We will just dance around it and let the taxpayers suffer.
In layman's terms, it costs €1,000 per kilowatt hour and the cost of making electricity is €10 per kilowatt hour. The kilowatt hour and all the rest are put in together and the highest price is paid for it. Any of us doing a business deal would not do that. The five or six of us here are small business people. We understand and we feel the pain of all the businesses. I am sure the Minister of State should too, in Limerick. This affects shops, butchers, confectioners and hairdressers; anything using the heat.
The Minister of State, Deputy Ossian Smyth, is gone. I asked for clarification yesterday that the TBESS, which was introduced to help people up to €10,000, is not applicable if they are using oil as their main source of heating. Where are they going to get piped gas or natural gas in the hills of Hollyford or Killenaule or up in the Knockmealdowns or the Galtees, or much lower down in towns that do not have natural gas? Very few towns have it, a handful in Tipperary. The genie is out of the bottle and the Government is caught napping. I could use another analogy; I will not but I might have to. The Government is wrong and hurtful to the people. I believe it flies in the face of God and it flies in the face of European and national law. What about our Constitution which says we are supposed to look after our people and cherish them equally? We want to honour the big boys.
There is a great wind farm rip-off where greedy electricity plants sell us electricity at sky-high prices. It is made from wind, hot air. Goodness, if we had a channel in here we would make a great few kilowatts of it too with the amount of hot air spoken in here at times. I can speak a bit myself as well; I will not exonerate myself from that. Our motion calls for implementation of EU Council Regulation 2022/1854, which came into effect on 8 October. Here we are in the middle of November with no sign of implementing it in this country.
When it comes to implementing something good for the people we are laggards and blackguards but when it comes to something that is punitive, whether it is in agriculture, stopping turf cutting or a plethora of issues we do it that night. We can put VAT up here at midnight on budget night and we are debating the Finance Bill 2022, including measures to take away company cars and benefit-in-kind. The Minister blindly said we have to deal with this. Businesses will close and companies cannot compete.
We are being penalised and all the workers are being penalised if they do not have a low emissions car. Where is the worker going to charge the car? Where is the infrastructure? Not only does the Government have the cart before the horse but the cart is gone down Dame St. while we are still here with the horse. If the Government had a horse it might break wind and the Government would ban it as well. That is the problem with the Government now that it has become so politically correct. I remember ploughing and bringing hay with horses and I drew water from a well with horses. Are we going to go back to that? We cannot boil the water either, unless we have the beart easnach and the sod of turf. The men in white coats should be around here regularly and checking if people in the Government are feeling okay.
What has gone wrong with the Government that it wants to drive our ordinary people into penury, hardship and misery? This includes the man and woman going to work, the delivery services and the man in the van who supplies this country. It also includes the self-employed man with a concrete lorry. I mention SuperValu, which has a chain in Tipperary. In some cases the ESB bill of these shops has gone up from €8,000 to €24,000. They will get half of that back but how are they going to come up with the other €8,000 every month? It is not doable. I mention the price of shopping and Mom's purse is not able to stretch. People will either be hungry or cold or in some cases it will be both. The fear and terror the Government has driven into people is palpable. The media has to take a fair share of the blame too for fanning the flames on climate change. It is real but it is not the be-all and end-all when we see, for example, coal mines being opened in Germany, plants being dismantled in the midlands of Ireland and set up again out foreign and exporting coal and bringing it back in refined. It is codology. If the forefathers who fought for this country thought we would inherit it and follow on with this madness and lunacy they would never have lifted a finger to free Ireland. They would have left it in the United Kingdom or done something else because it is mockery, madness and a charade.
The Government is not opposing our motion so I ask it to implement it. Is this another one of the magic tricks or the liquorice allsorts? The Government will not oppose it but it will not implement it either. There is a statutory instrument to be signed into law to make sure that if we are buying energy in bulk the vast majority of what is produced by wind is not charged at the same price as oil. It is making a mockery of the Government's clean energy and how it wants people to go off fossil fuels. It is a three-card trick and these days it is becoming a 24-card trick. All the while the Minister for the Environment, Climate and Communications, Deputy Eamon Ryan, is outside eating lettuce and smoked salmon with all the rest of them and God knows what they are not eating at COP27; I have not seen the menu and nor do I care about it. I hope meat is on the menu and it might be €120 per plate. I would not look at those lavish things; I would only aspire to them at a wedding and I have a wedding coming up shortly. My daughter is getting married Friday week and hopefully we will have a feast and a good day. We will celebrate as we always do. We want the Minister of State to implement the statutory instrument.
Will the Deputy give a speech at the wedding?
The Deputy should invite the whole House and we would all be there.
I know they would. I know what kind of hangers-on some of them are and they would arrive to the wedding all right. I mean no disrespect in that. This is a serious motion and we are serious about climate change but we want to bring the people with us. All stick and no carrot will not work.
All duck with the Government alright.
Question put and agreed to.
Cuireadh an Dáil ar fonraí ar 11.54 a.m. agus cuireadh tús leis arís ar meán lae.
Sitting suspended at 11.54 a.m. and resumed at 12 noon.
