Pa Daly
Question:138. Deputy Pa Daly asked the Minister for Climate, Energy and the Environment the measures he is taking to reduce the price of energy; and if he will make a statement on the matter. [14765/26]
Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions
Energy Prices
Every time I raise this, I am astounded by the lack of progress on it. We have the highest energy prices in Europe, according to Eurostat. The national energy affordability task force has only met three times since its inception. The only thing it has produced is an interim report. No steps seem to have been taken to reform the Irish energy market and to hold energy companies to account, measures we have been calling on for years. What is the Minister going to do to reduce the price of energy and will he make a statement on it?
I thank the Deputy. First, to correct him, we do not have the most expensive energy prices in Europe. Energy is still too costly and we have got to work on that. It is a priority for Government to bring about changes in that regard. Not all of it is within our control. That is why we need to continue to expand renewables, invest in our grid and drive affordability.
The programme for Government acknowledges the increased energy cost pressures on households and commits to bringing forward measures to contain energy costs and tackle energy poverty. Government has introduced a suite of measures already to help households and businesses deal with the cost of energy. For the record, in budget 2026, we approved an extension of the 9% VAT rate currently applied to gas and electricity until the end of this decade, 31 December 2030, saving households up to €100 on average per annum. In January, the fuel allowance payment increased to €38 per week, equating to an increase of more than 15%. Eligibility for the fuel allowance was also extended to those in receipt of the working family payment. About 460,000 households across the country are receiving those direct support. We extended the €400 income tax disregard for households involved in microgeneration for a further three years to the end of 2028. A record €640 million will support the SEAI residential and community energy upgrade schemes. That is really important because we are driving permanent savings for families through retrofitting. We estimate that savings of up to €1,200 per annum can be achieved through retrofitting homes. We have revised those grants very substantially make them more accessible to households and particularly middle income families. We are going to continue with the warmer homes scheme as well and improve the outputs from it.
I also met our four largest energy suppliers, as the Deputy knows. I asked them to stand up hardship funds which, to be fair to them, they did. We will continue to make sure the resources go to helping those families who need it most. There is more that needs to be done and I will come back on a supplementary.
The problem with some of the schemes that have been introduced is that they are not working. Some of them are deeply regressive and inequitable. Most low to middle income households have significant barriers if they have any hope of reaching a B2 standard. What about the solid fuel homes which are mostly rural and are mostly home to elderly people? They are punished by the Government rather than being helped, through hikes in the carbon tax, which are now supported by the Healy-Rae brothers, where there is no accessible, affordable alternative. The same is true for those who rely on home heating oil. On the retrofit loan scheme the Minister mentioned, fewer than 2,000 households have availed of these loans since the scheme started. When we tried to put questions about how far away we are from the 2030 target, I was told it was not the Minister's responsibility. Whose responsibility is it?
There is something wrong when the International Energy Agency has called into question the huge gap between retail and wholesale costs. What is the Minister doing to reform the energy market? It costs about three times more to buy energy here than it does to produce it. The ESRI is also saying prices are way above what they were on the eve of the election.
There is more work that needs to be done. That is why I established the national energy affordability task force. On what it has done so far, significantly before the last budget, it produced its interim report which guided us in the last budget. That work continues - things like looking at the structure of the bill and at how we actually pay for our grid investment. Critical to that, if we are to deliver permanent affordability, is to ensure that investment in our grid of €18.9 billion over just this five-year period actually takes place. There are 520 capital projects across the country that will enable us to bring more renewables into our system with cheaper, secure, green, clean energy. We need projects like the North-South interconnector delivered. That one project alone will deliver savings of about €120 on average per household on this island, and will improve grid resilience as well.
The Deputy can be assured that those who require assistance with regard to energy and energy poverty will receive the assistance they need in a targeted way. I would rather invest the close to €3.5 billion that was paid in energy credits into permanent changes in our energy system, which is what I am doing.
The last time I raised this issue the Minister said he would look at network charges. What has he done since then to restructure them to make sure that data centres, for example, pay their fair share and take the pressure off households? In the next few months there will be a significant opportunity to bring about fundamental reforms to the energy market that could help households. A meeting is taking place in March. Ireland will hold the Presidency from July. This has to be the Minister's priority. The price of electricity is coupled with the wholesale price of gas due to the marginal pricing system. We have said for years that it has to be reformed. Will the Minister take steps to deal with that? Will he give the regulator the power to tackle price gouging? Is he holding it to account? Will he restructure network charges to ensure that data centres pay their fair share? Will he guarantee that the costs proposed for LNG and data centres are not passed on to households in the legislation for the strategic gas reserve and that relating to private wires?
At every meeting of the Energy Council I have attended, I have raised the issue of affordability. This is an issue that is prevalent in most EU states to varying degrees. I would like to see changes to the regulatory framework happen. Most of that needs to be driven at EU level. Issues relating to, for example, the Spark app need to be dealt with as well. Those issues are being looked at European level in relation to affordability when it comes to energy, particularly for households and small businesses.
What the national energy affordability task force and I will be looking at this year is what we can control ourselves. We are still heavily dependent on imported fossil fuels. We need to reduce that dependency. We hedge and we buy forward. That is why when people see wholesale gas prices fall, there is a lag time before we see retail prices fall. We are focused on delivering price reductions over the course of this year on energy. It remains an absolute priority for me.
Electricity Grid
Pa Daly
Question:139. Deputy Pa Daly asked the Minister for Climate, Energy and the Environment if he will consider bringing forward a prioritisation framework for grid connections; and if he will make a statement on the matter. [14766/26]
This question has come up in the past. Will the Minister consider bringing forward a prioritisation framework for grid connections, particularly as we have a crisis in the context of housing and the cost of living? We have all heard about the problems with the MetroLink, for example, and the energy that will be needed for it. There is a reckless attitude towards data centre expansion. Even the Minister's officials agree on that. The Minister knows that he needs to bring forward legislation to deal with the prioritisation framework. Will he bring it forward?
The CRU is responsible for grid connection policy. I will be working on reforming the CRU, something that is needed. We are also securing additional resources for the CRU, which I welcome.
The CRU was assigned responsibility for regulating the electricity sector following the enactment of the Electricity Regulation Act 1999. The management of and matters related to connections to the electricity grid are functions assigned to ESB Networks and EirGrid under rules determined by the CRU. These organisations are independent of me, as Minister, in the exercise of their respective functions. Having said that, PR6, which is the grid investment I spoke about in my previous response to the Deputy, details what we need to do with our grid to be able to deal with the growth that will occur in the residential housing market, the industrial sector and all other sectors, including transport. Record investment of €18.9 billion over this period will deal with those demands.
We need to expand our grid by way of distribution, storage and generation. The last full year for which I have data on generation through renewables is 2024. In that year, over 40% of our electricity was generated via renewables. That is growing which is a good thing but we need to improve the resilience of our grid and expand it which we will do. That is why on behalf of the State we are investing €3.5 billion in equity in EirGrid and ESB. PR6 has been published. It details what those grid investments will deliver. There is no question of putting data centres ahead of residential developments. That has not happened and will not happen. We also need to grow our industrial base and create jobs for our people. We need to ensure that we have a grid which supports growth in our residential and enterprise sectors.
A grids package was announced on 10 December. It gives the Government the green light to move away from the first-come, first-served model that gives rise to rampant data centre expansion that has displaced the delivery of housing and transport and led to the hiking up of energy prices for households. The Commission stated, "In areas with long waiting times for grid connection, the first-come, first-served principle should be abandoned". We will bring forward legislation on that in the coming months. The current model is broken. The Minister's officials will agree with that. The Secretary General of the Department has said that there are difficult choices to make between housing and AI. Instead of prioritising the corporate bottom line, I want the Minister to prioritise ordinary people who are going through a cost-of-living crisis. We have seen data centres expand to the point where they account for one third of energy demand. Dealing with this matter is within the Minister's gift. He cannot hide behind EU rules and regulations. Will he agree to support our legislation to put that prioritisation framework in place when it comes through?
When Sinn Féin publishes its legislation, I will certainly look at it in a constructive manner. Data centres underpin an important technology sector in this country that employs hundreds of thousands of people. We have not had a situation, nor will we, where a data centre is connected ahead of a housing development. That just does not happen. It has not happened. We need to be at the cutting edge when it comes to technology. We should not turn away either indigenous or foreign direct investment. We need to look at expanding capacity in order to accommodate that investment and deal with the increasing energy demand we have. That demand is going to increase by another 50% between now and 2035. This is why it is imperative that we invest in our grid at a rate we have never seen before and deliver projects like the North-South interconnector, on which the Deputy's party has different views north and south of the Border. The bringing forward of legislation might afford the Deputy an opportunity to clarify the position of the main Opposition party with regard to that important infrastructure.
The Minister recently met the ESB and EirGrid to discuss house connections. There was a story in The Irish Times about that matter over the Christmas period. The Minister knows that under the current regulation, it is first-come, first-served model. He also knows that for this to change, he must empower the regulator by means of new legislation. He knows in light of the grids package and the new guidance for connections, there is nothing standing in his way in this regard. In the interview, which was published on 30 December, there was no indication that the Minister had any intention of bringing legislation forward. What took place in the meetings with EirGrid regarding connections? The Minister knows well that the ESB and EirGrid cannot do anything until the regulation is changed. Will he bring forward legislation in order for this to happen?
I should have said in response to the Deputy's initial question that I welcome the publication of the grids package. The package speaks to the issue across all member states whereby we collectively invest in our grid system and look at expanding interconnection and see where the EU can assist in the context of funding between member states and third countries.
I again ask the Deputy to clarify the position of his party regarding the North-South interconnector. Does Sinn Féin support it or not? Does it agree that it is a critical piece of infrastructure on this island? There is a 32-county, all-Ireland electricity market. If anything, one would have thought that we would collectively support improving the resilience of that market. The North-South interconnector is critical to that.
We will embark on drafting legislation in respect of the CRU. There is a commitment in the programme for Government that we will look to work with the CRU to reform its structures and examine its mandate. I will deal with the Deputy and the Oireachtas committee at the appropriate time. I would welcome his input.
Question No. 140 taken with Written Answers.
Electricity Grid
Pa Daly
Question:141. Deputy Pa Daly asked the Minister for Climate, Energy and the Environment in relation to private wires, the charging methodology that will be implemented; and the safeguards that will he introduce to ensure that all of the costs of providing the original grid connection will be recovered by the ESB Networks, and that these costs are not passed on to other customers. [14767/26]
This question relates to private wires. Will the Minister outline the new methodology that will be implemented? Will there be safeguards to ensure that all of the costs of providing original grid connections will be recovered by ESB Networks? Will action be taken to ensure that these costs will not be passed on to customers?
Under current proposals, any user taking all their energy capacity from a private wire will not be required to pay network charges to the system operator despite relying on the public grid for backup. We have been speaking about the energy costs and the price of the same. Will the Minister guarantee that households will not incur more costs?
It is critical that we get the legislation on private wires through. The Deputy is broadly supportive of what is proposed. It will make a significant difference here. The general scheme was approved on 16 December 2025. Since then, my Department has been engaging with the Office of the Parliamentary Counsel to the Government, OPC, to begin drafting the legislation required to bring forth the private wires regime. I assure the Deputy that introducing this regime is an absolute priority. From electricity generation to a point-to-point scenario, I believe that we can deliver further projects by using private wires. However, they are going to have to be up to the same standard that applies in the context of delivering our own grid.
The Joint Committee on Climate, Environment and Energy, of which the Deputy is a member, will undertake pre-legislative scrutiny of the general scheme of the private wires Bill this week. It is the intention that the eventual Bill will complete its passage through the Oireachtas as early as possible this year. I am aware that the committee is going to deal with the general scheme in a truncated manner. However, I ask those involved to note that it is critical that we get the Bill, when it is forthcoming, passed. I will be seeking co-operation from those on all sides of the House to see if we can do that as quickly as possible.
On the Deputy's question, the policy statement that was approved last July and that gave way to the introduction of private wires will require a review of the network recovery charges. The relevant methodology will be created in line with the private wires policy, ensuring that private wire entities will pay the full cost of the service they have sought from or that is provided to them by the national electricity grid. The general scheme introduces a licensing regime whereby the CRU can recover such costs and introduce a charging methodology. The specifics around that in the context of the potential for disconnection charges, a standby network charge and more will be outlined in subsequent regulations drafted by the Department. Effectively, there will be a cost-recovery mechanism in respect of those who deliver them and those who are using them.
We will be discussing that tomorrow. The concern of many members of the committee is that the proposals will exacerbate the regressive and inequitable way that network costs are currently distributed. According to Eurostat, Irish households have the highest electricity bills in Europe. As a result of the proposals being brought forward, households could be landed with a rake of new charges on their bills in addition to what they already pay.
The Minister mentioned about PR6 in reply to earlier questions. There is a new levy to fund LNG from increasing network charges on bills. Energy users and consumers are being hit from pillar to post with a host of new charges. They do not want to be subsidising the network charges relating to data centres, and we do not want to be obliged to do either. What will the situation be when it comes to mandating data centres that are proposing to have renewable energy when they are putting their own private wires in?
The large energy user policy is really clear when it comes to the future growth of large energy users such as data centres. They will have to bring forward 80% of that energy as new renewable energy. We are the first country to do this. It will not be a drain on our existing resources. It will be about providing additional renewable resources.
I have been clear with regard to private wires. Private wires should be and are a positive thing. They will unlock a lot of opportunities and investment. They will ensure the delivery of additional networks across our country that will be up to the same standard as our own grid. As already stated, the private wires entities will pay the full cost of the services that they seek from or that are provided to them by the national electricity grid.
In relation to PR6, which is the biggest investment that we have ever made in our grid, we are looking at, on average, about €18 per annum of an additional charge per household. That is about €1.50 per month. The North-South interconnector alone will deliver savings to households of over €100 per annum. That is why it is critical that projects of this sort are delivered. The cost to which I refer will be well offset by savings.
Is the Minister going to ensure that the North-South interconnector will be underground? That is the fundamental issue for people who live in Border communities.
On the basis of what he said, is the Minister guaranteeing that there will be no new costs passed on to consumers as a result of the private wires legislation? Consumers cannot afford any new costs. There is a concern to the effect that the private wires legislation will undermine climate obligations by diverting energy. We have seen in the past few years the increase from wind and the new energy coming onto the system, but it is all being gobbled up by the data centres and other large energy users. A fundamental concern is that this will continue despite all the efforts the Government and people are making in the context of onshore and offshore energy. One Minister even admitted that the Government has been sitting on its hands and navel gazing when it comes to offshore wind. We do not want that to happen.
Who said that?
Which one?
To be clear, there will be a cost recovery on private wires by those who deliver them. There will be no increase in costs. That methodology will be worked through. That will be discussed as part of the pre-legislative scrutiny that the committee will be going through tomorrow.
In the context of the advancement in renewables, if I go back 15 years, only 13% of our electricity was generated by renewables. At the end of 2024, it was over 40%. It is not the case that the increase in renewables is being gobbled up by data centres. That is simply not true. Our job is to accelerate the delivery of renewables, both solar and wind, and to get offshore into construction by the end of the decade, which we will do. That will be critical in the context of allowing us to meet our climate action obligations and targets. It can be done. Maybe not all by 2030, but there is real momentum in that space. There is real momentum across the renewables sector, both wind and solar. We are now seeing an advancement in biomethane, and work is also being done district heating. There is a lot to be positive about.
Energy Policy
Carol Nolan
Question:142. Deputy Carol Nolan asked the Minister for Climate, Energy and the Environment to provide an update on the work of the national energy affordability task force; and if he will make a statement on the matter. [14498/26]
Will the Minister provide an update on the work of the national energy affordability task force? The Irish SME Association, ISME, has published the results of its latest members' survey, identifying the priority issues facing SMEs this year and showing that business costs overwhelmingly dominate their concerns. Some 78% of respondents said that these concerns include energy and other overheads, all of which ISME rightly notes have been subject to sustained and significant inflation in recent years. Alarmingly, ISME also notes that despite easing inflation in some areas of the wider economy, these structural business costs have not moderated. What is the Government doing to address this issue for consumers and small businesses in Offaly?
I thank the Deputy very much for raising this very important issue regarding energy affordability. The latter is a priority for the Government. I answered a similar question from Deputy Daly earlier.
In June of last year, we established the national energy affordability task force. Its job is to identify, assess and implement measures in the short term that will enhance energy affordability for households and businesses, while delivering key renewable commitments, protecting security of supply and ensuring economic stability. The task force membership includes representatives from various Departments and key energy stakeholders. Its first report set out measures for consideration in the context of budget 2026. It recommendations brought about a 15% or €5 per week increase in the fuel allowance, which will provide an additional €140 to over 450,000 recipients during the annual fuel allowance season. Eligibility for that has also been extended to those in receipt of the working family payment, which is about another 50,000 households. In addition, the extension of the reduced VAT rate of 9%, which applies to gas and electricity, has been extended to 2030. This provides real clarity to energy consumers and reduces bills for households by about €100 per year.
This year, we will also be investing in the region of €640 million to support residential and community upgrade schemes.
This includes €340 million for the warmer homes scheme, which provides 100% grants, delivering permanent savings for households. The business support grants also deliver permanent savings. On a per capita basis, it is the most significant retrofitting investment that any European state is making. The focus of the task force has turned to the preparation of an energy affordability action plan. This will be completed in the third quarter of this year. That plan will include a review of the cost drivers within the energy sector and consideration of how the EU action plan for affordable energy and associated guidance can be implemented in an Irish context. The next meeting of that task force will take place in March. It is important to note that ongoing bilateral engagement and sectoral work also happens between meetings. There is more work to be done in that space and we are determined to do it.
I thank the Minister for his response. The fact is that, while some supports were given to small businesses and consumers in general, to date, very little has been achieved in tackling the source of the great energy price rip-off that continues day in and day out for households and small businesses, many of which in my constituency have closed due to energy costs. The capacity to absorb these energy costs is just not there, as ISME has identified. The costs impact everyone from the owners of pubs and retail stores to the hairdressers and the farmers. This is why I can only agree with ISME on its statement that "the survey findings underline the need for Government to focus on structural cost competitiveness in 2026, rather than layering additional obligations onto small businesses already operating on tight margins." The profiteering that has gone on is simply scandalous. Perhaps we need to adopt the equivalent of the unfair trading practices directive and the approach of the Agri-Food Regulator so that we can see exactly how these obscene energy prices are calculated and why Irish consumers and businesses are so slow to see any meaningful reduction in their energy bills when wholesale gas prices reduce.
Energy costs are a real issue for households and small businesses in particular. I agree with the Deputy completely on that. We must do everything within our power to help to reduce those costs. With regard to real structural reform, she will know that the previous Government brought in energy tax credits. The State invested about €3.3 billion in that. That could not be sustained into the future. Instead of that, €3.5 billion is being invested in equity funding to EirGrid and ESB Networks so that they will be able to fund measures under PR6. That will be a step change. It is an investment in grid capacity and grid resilience and it will also drive affordability. I agree that we have to look at structural cost competitiveness. The national energy affordability task force, NEAT, I have established will be looking at the very make-up of our electricity bills. A lot of it does sit within the EU framework, however. Some of it is within our control and we will look at that. That report will be published in the third quarter of this year. I will look to bring further measures forward this year.
The Minister mentioned tax credits. While the energy tax credits were welcome, they let the energy companies off the hook. I called for the energy companies to be brought in here a number of times. The profiteering was scandalous. We were seeing businesses really grappling with costs. A long-term solution is needed. I hope this task force will produce proper practical solutions to get to grips with this issue once and for all and to send a message to the energy companies that their ongoing profiteering is not acceptable. Government needs to send that message.
A report on wind energy was published this week. It stated that energy generation costs for the State are over €1.5 billion. Again, where are households and businesses seeing the benefits of this trickling down? Small businesses are trying to operate on thin margins while being bound within an energy-cost straitjacket that is making it harder and harder to sustain financial viability. I am concerned about rural jobs in my own constituency of Offaly. We must do everything we can to protect jobs.
I was in Offaly last week, where Bord na Móna is doing work and where Statkraft is developing new battery storage facilities, which are critical. We now have nearly 1.5 GW of battery storage across the country. This allows us to plan and to distribute our energy, particularly renewable energy, at appropriate times to deal with peaks within the system. That is being expanded further. Offaly has actually been a leader in the delivery of renewable energy. At the same time, Bord na Móna is doing really good work with regard to habitat restoration. It is about increasing the amount of energy we own. It is also about clean, green and cheaper energy. We are overdependent on imported fossil fuels. Only about 25% of our gas is sourced domestically. The rest is imported. We are always at risk from the vagaries of the energy markets. The reason for the gap between the wholesale price and the retail price and the delay in reductions trickling down to the customer is that, because Ireland is importing so much, we are buying ahead or hedging. Those decreases therefore take longer to reach households. That is why we need to expand our renewable capacity. We are doing that year on year. I predict that this year will be a record year for the delivery of renewables with regard to both new projects and consents for new projects.