Vol. 1084 No. 1
84. Deputy Ciarán Ahern asked the Minister for Climate, Energy and the Environment in light of the recently announced suspension of the carbon tax increase, the way in which he plans to make up the shortfall in funding allocated in budget 2026 to the SEAI for home energy upgrade schemes, and to just transition; and if he will make a statement on the matter. [27884/26]
I thank the Deputy for this timely question.
The allocation of the carbon tax is a matter for the Minister for public expenditure and reform, who took questions just before this. There has been no change because of the pause in the increase in the allocation for 2026. That was published as part of the Revised Estimates Volume, REV, last December and approved by the Dáil on 26 March 2026. Within my Department's 2026 allocation, there are three areas that received funding from the carbon tax. First, in the residential community retrofit programme, the budget allocation is a record €641 million this year, including €558 million from the carbon tax. We are planning for this to support the home energy upgrades of 73,000 homes this year, including solar PV. The target includes 11,500 fully funded home energy upgrades under the warmer homes scheme, which we discussed yesterday at some length, for households at risk of energy poverty. A record of over €340 million of the budget has been provided for this year. There has been a significant investment and year-on-year growth in home energy upgrades. From 2019 to December 2025, about €1.7 billion was provided in support for homeowners. We have done about 244,000 homes under that, including almost 33,000 fully funded upgrades, particularly focusing on homes at risk of energy poverty through the warmer homes scheme.
To answer the Deputy's question directly, the budget and allocation this year is not affected by not increasing the carbon tax this year. I will come back in on a couple of other areas that we are funding, such as the just transition fund and the green climate fund.
There were any number of interventions that we felt that the Government could have made to alleviate and reduce the cost of fuel for hauliers, farmers and everyone else. It is very disappointing that the one climate-friendly measure here has been undermined, and that the Government has chosen to jettison this over other subsidies, direct payments and excise cuts. These are all measures that we want to support. Our fear here is that the Government has deferred this amount and it was scheduled to come on in May because, as it was put in the budget, the increase on home heating fuels will take place in May, after the winter heating season. It has now been deferred to the winter. The fear is over whether it will be deferred again. Is it realistic to think that the Government is going to implement it in October as people are filling up their tanks again?
It is a good question. What we have tried to do regarding the support package of about €750 million is to make sure that it is balanced and targeted. We have done decreases in excise duty. We have also brought forward specific schemes of support for vital sectors. For example, the haulage sector has been provided €40 million per month for three months in targeted payments and there is €100 million for the agriculture scheme. That is to help with the fuel price spikes and increases we have seen because of the outbreak of the war in the Middle East.
Specifically on the Deputy's question, I will defend the carbon tax. To be fair to the Deputy, colleagues in the Labour Party and other parties in the Opposition, with the exception of the main Opposition party, support the carbon tax because it brings forward specific ring-fenced funding in order that we can protect households and businesses against future shocks. This is a deferral of this increase.
That is all it is. We will target resources in specific areas, reduce costs and certainly ensure there are no further increased costs because of Government tax in the middle of this year.
It is a central plank of addressing climate change in this country. It is a crucial funding source if we are ever going to move away from our dependence on fossil fuels. I take the point that it is for the Department of Social Protection but the Minister was not able to give me any figures for how much this deferral will cost. I would appreciate if the Minister's Department or the Department of Social Protection could get back to me on exactly how much it will cost. On an ongoing basis, will this be made up from general taxation? Are we giving up on the polluter-pays principle or is the Minister determined to ensure the carbon tax increases that have been legislated for will happen?
This is not a cancellation of an increase; it is a deferral. The cost is approximately €22 million in paused tax receipts. To put that in context, the overall investment from 2019 to now is over €2 billion. Our budget for this year, I assure the Deputy, is unaffected. We have also changed the retrofitting grants for households and seen a significant uptick in applications there. We want to bring forward a retrofit passport to make it more accessible, particularly to middle-income earners. We are seeing a significant increase in applications for heat pumps because we upped that grant to €12,500 - the cavity wall grants as well.
We had a good debate on solar yesterday. The Social Democrats brought forward some ideas around that. I want to accelerate solar further. We did 33,000 solar installations last year and can do more this year. We want to target those who are at energy security risk or energy poverty risk. We will protect the carbon tax because it is a clear mechanism for us to be able to protect households and businesses into the future.
83. Deputy Pa Daly asked the Minister for Climate, Energy and the Environment the steps he is taking to eliminate the risk of electricity blackouts due to risk to grid stability that is posed by data centres (details supplied); and if he will make a statement on the matter. [26187/26]
EirGrid, the national grid operator, has issued a stark warning that blackouts are almost certainly on the cards because of the negligence of the Government. It is not the first time; it has been making these warnings for ten years and Governments have refused to listen. The red carpet is being rolled out for data centres, yet we cannot build houses or connect public transport. We are told the lights could go out. What steps is the Minister taking to eliminate any risk of blackouts due to the threat to grid stability posed by data centres?
That is not what EirGrid said. We have to put the facts on the floor of the House. EirGrid is the transmission system operator responsible for managing our power system at all times. It is independent of me as Minister but I meet and engage with its representatives regularly in the exercise of their functions. They are accountable to the regulator, CRU.
Fault ride through is what the Deputy is referring to. It is a growing grid stability and electricity security risk for energy system operators worldwide. We are not the only country looking to mitigate potential risks, regardless of how small they are. We saw what happened on the Iberian Peninsula and in Virginia in the United States. Every system operator is looking at its risks, regardless of how small. We are not in a situation whereby we are at risk of a blackout, I assure the Deputy.
In line with EirGrid's licence obligations, it has been proactively managing this issue but, similar to other jurisdictions, believes additional measures are needed to ensure grid stability is not compromised in the short term. That is being looked at right across Europe. EirGrid has submitted new timebound requirements for large energy users to CRU for assessment and a decision. I have engaged directly with the sector as well. There has been a good collaborative approach. It is just risk mitigation. It is not that there is a risk of blackouts, as the Deputy said. Systems operators always have to look at what could happen in the future and look to mitigate risk. That is the appropriate and sensible thing to do. The sector has been collaborative and constructive in its approach. This is a short-term measure to mitigate small potential risks. It is the right thing to do. CRU will determine how the fault ride through and the new grid operation pertains to the application from EirGrid.
I see what the Minister is saying, but will there be a prioritisation framework so, for example, housing and public transport can be prioritised ahead of data centres? It is one third of our electricity and it is predicted to go much higher. It is already causing grid interventions and higher household bills. In the midlands in particular, it is preventing housing being built. Data centre demand has skyrocketed and gone out of control. It could not have been anticipated five or six years ago how high it would go - up by over 500%. EirGrid has been concerned about it and has introduced new emergency protocols. The risks to the economy are more than that. There are risks to economic stability and to societal trust, in that ordinary people see the percentage of the bills they are paying and see proportionally lesser charges being paid by data centres.
That is not the case. Industrial and economic growth is not in conflict with growth in housing output. In the past five years, we have delivered 135,000 new homes; last year, over 36,000 new homes. That is good and is what we need to do. In PR6, the grid investment programme that has been published and that is there for everyone to see, there are about 520 capital projects. As part of that, it states what this investment will support. It supports large energy user growth, housing growth and other industrial and economic growth. That is right and proper.
In this discussion, data centres are treated by some as a negative. They underpin tens of thousands of jobs in this country. We are at the leading edge of new technologies and cloud technologies and should continue to be at the leading edge. That is why the grid investment programme and capital projects like the North-South interconnector are so critically important and we are going to get on and do those.
The Construction Industry Federation has said housing delivery is being held back by significant delays in electricity connections. Last year, while 60,000 homes were commenced, completions remained far below what is needed. The Minister is saying housing is a national priority but the energy policy allowed massive developments to absorb grid capacity first. We are not, contrary to what the Minister says, anti-tech or anti-business. It is about sequencing, fairness and priorities. The data centres can wait for their connections; housing and families cannot. Homes must come before hyper-scale electricity demand from the large energy users.
The bottom line is this. Housing is not failing because builders cannot build, but there is a threat to it. What specifically is the Minister doing to prevent that?
We need a plan-led approach to this and that is why we have published the large energy user action plan. The final decision has been given on that, which is very clear. It involves a planned approach to where and how we deploy electricity and energy resources to enable large energy users to grow and to enable us to continue to attract increases in domestic indigenous business and in foreign direct investment. That is critical. One is not in conflict with the other. The measures for which EirGrid has sought approval from CRU are appropriate and are risk-mitigation measures. Many other TSOs across Europe are doing the very same thing and it is right, proper and responsible that we do that. Housing growth and industrial growth are not in conflict. We need to continue to accelerate delivery of our grid investment programme, which we will do.
85. Deputy Pa Daly asked the Minister for Climate, Energy and the Environment the steps he is taking to shield households from the energy crisis triggered by the US and Israeli attack on Iran; and if he will make a statement on the matter. [26188/26]
What steps is the Minister taking to shield households from the energy crisis, which has been triggered by the US and Israeli attacks on Iran? Will he make a statement about it? He will have seen that over the past couple of weeks, the Government lost the confidence of the people, even one of its own Ministers. The Government has not done enough, particularly for people whose home heating oil bills have effectively been doubled. There are 750,000 households affected, often in rural areas, often in single dwellings, and often with older people. What are they supposed to make of the Taoiseach saying he hopes they will have a good summer while the cost of filling their tank has nearly doubled?
As Ministers and as TDs, we fully understand the pressures households and businesses are under due to the price increases because of the outbreak of the war in the Middle East. It is a global situation that every country is grappling with. By any fair assessment, the intervention that the Irish Government has made on behalf of its people amounts to multiples of the value of others made in the EU. It is about 7. 5 times greater, per capita, than that of Germany. It is the largest one that any state has actually made to support businesses and households.
I refer to the reductions in excise on diesel, including agricultural and green diesel, and petrol, and also to the reduction to the National Oil Reserves Agency levy. All of these add up to a significant saving. People are still under pressure, absolutely. We get that, and that is why the measures we bring forward have to be targeted.
One quarter of Irish households, or about 470,000, receive direct supports through fuel allowance payments. We have extended these for a further month. We increased the payment per week in the budget. We have increased that further in a time-bound manner, effectively by extending it for a further month.
We are not going to be able to protect every sector from every price increase. Obviously, what we want to see is a de-escalation of the conflict and a return to normality. What it does speak to as well is the absolute need for us to continue to accelerate energy generation from renewable sources.
On a positive note, we saw last month, in March, that 49% of our electricity was generated through renewables. We are continuing to accelerate the deployment of renewables to reduce our dependence on fossil fuel, which is a risk for this State and many others. We are dependent on other countries for the energy that we use. This conflict, in particular, means we need to accelerate the deployment of renewables further. I assume I will receive the support of the Opposition in doing that.
We saw yesterday the Taoiseach clapping himself on the back because, since 2022, the worst of the rises in electricity bills had been cushioned by supports given by the Government. In this regard, there were electricity credits promised in the run-up to the election. However, the supports have been stripped away, leaving ordinary householders even more exposed. Compounding matters was the dismissive attitude of the Taoiseach. The Minister may or may not wish to comment on the Taoiseach’s comment that he hopes there is a good summer ahead for people.
Would the Minister consider removing the excise duty on home heating oil, decreasing it by €200 per tank, and introducing more concrete measures to deal with what is effectively a doubling in price, particularly for people in rural areas? We are already paying the highest electricity prices in the EU. There has been a failure by the Government to deal with this. Electricity credits have been stripped away and the response does not go far enough.
The Taoiseach has not been dismissive in any way, nor has the Government as a whole. Maybe the Deputy could explain why his party was the only one on the Opposition benches to vote against every excise reduction when the first round of packages was introduced, on 25 March? It did that again this week. It voted against the measures introduced by the Government in the Dáil by way of financial resolutions to reduce costs for households and businesses. Sinn Féin was the only Opposition party on 25 March to vote against the initial package, worth €250 million. I do not understand that.
Sinn Féin is for abolishing the carbon tax. The carbon tax retrofits homes and businesses to protect them, reduce their energy use and make them more efficient. It is a good climate measure, but it is also a really good cost-saving measure. Sinn Féin has never explained where it would get the €660 million or so that we are going to invest this year to retrofit 73,000 homes, and also the carbon tax revenue that deals with the agri-climate environment scheme, other such schemes and business support grants. Where is that money coming from? Where would Sinn Féin get the money for a proposed further cut in excise to the tune of about €200 million?
Unfortunately, last time I checked it was oral questions to the Minister and not questions for the Opposition. Unfortunately, the Minister has not dealt with my questions. That he answered a question with a question makes me wonder whether he is from Kerry, by any chance. He has not answered any of the questions we have asked. What specifically will he do to ease the burden on rural householders posed by the price of home heating oil?
The protests over the last week are the tipping point. They are the final straw for people who are already struggling from week to week, often in households with dual incomes. I have spoken to a lot of people who have been working in farming or in factories. Their partners might also be working, maybe in the HSE, but those people are struggling and unfortunately the measures have not been enough. The package the Minister spoke about was half baked and was not complete. It did nothing, and the people's response will show that it did nothing to address the matter.
It is not a fair assessment to say we have done nothing. Ours was the largest intervention that has been made in the EU. I simply asked the question of Sinn Féin, as the main Opposition party and the one that presents itself as the potential alternative Government after the next election, in 2029, where it would get the money from? How would it pay for the retrofitting of houses and businesses? How would it pay for solar grants and heat pump grants? How would it pay for all the things that ensure the 244,000 homes already retrofitted are protected from aspects of price increases because they are using renewable sources? It has just never been explained to me. It is important that Sinn Féin do that.
I could go through all of the measures. Sinn Féin knows all the measures that we introduced, because it voted against them all. I really do not understand its position in this regard either. Sinn Féin was the only Opposition party to oppose decreases in costs to consumers, including households. It just does not stand up.
86. Deputy Jennifer Whitmore asked the Minister for Climate, Energy and the Environment for an update on the CRU price-gouging investigation with regard to energy prices; and if he will make a statement on the matter. [27417/26]
Could I have an update on the CRU price-gouging investigation that the Minister called for with regard to energy and electricity prices?
I thank the Deputy for the question. I understand she wants clarification specifically on the review of the pass-through from wholesale electricity prices to retail electricity prices that the Minister, Deputy O'Brien, requested the CRU to undertake. As the Deputy knows, retail electricity prices are influenced by several factors, including wholesale energy prices, system operation costs and supplier hedging. The latest data from Eurostat shows that, in nominal terms, Ireland ranked fifth for household electricity prices among European countries in the first half of 2025. When adjustments are made for purchasing power parity, Ireland is about mid-table in terms of affordability, with its electricity prices being the 12th highest among European countries.
In a report from last October, the International Energy Agency, IEA, observed that Irish retail prices had not adjusted at a pace comparable with that of the decline in wholesale prices, with the energy component of retail prices remaining up to three times that of wholesale prices. While the CRU has found no evidence of market failure or windfall profits in the retail sector in its market monitoring role, the IEA findings underline the importance of progressing the programme for Government commitment to commission an independent review into the speed and the level of pass-through from wholesale prices to retail prices.
The Minister wrote to the CRU to request that it commence the independent review, building on the work of the previous CRU investigations, reviewing the competitiveness of the Irish retail energy markets, examining supplier costs, including hedging and pricing practices, and providing price analyses to compare with other EU member states. This will also assess whether measures are warranted to enhance market responsiveness to wholesale price changes and make recommendations to ensure the benefits of lower wholesale prices are felt by the consumer.
We are all aware that hundreds of thousands of households are finding it difficult to pay their energy bills and what we saw last week is a direct result of that. An estimated 315,000 people are in arrears on their electricity bills. Many of them have been in arrears for more than 19 months. These are people who are still not able to catch up with the incredible price shocks we experienced after the Ukraine invasion.
One of the roles of the CRU is to protect customers. The Minister has asked the CRU to look at the pass through of wholesale prices. Right now, wholesale prices are 72% cheaper than they were at the peak in August 2022. They are 72% cheaper, but our retail prices are not 72% lower. In fact, they are higher. We have not seen any reduction, and I do not think hedging can be used as an excuse. Will the Minister of State provide an update on what the CRU has done and when it will it be publishing its report?
The Minister and the officials in the Department have been engaging with the CRU to emphasise the importance of this. We all know the impacts that people are feeling. We know that the cost-of-living crisis is a result of significant increases in inflation in recent times. Of course, we all desire to try to resolve this. As the Deputy knows, the Minister commissioned a report on the national energy affordability task force. The first phase of that work came through prior to the budget last year. That is ongoing work to try, in so far as the Government can, to intervene to get that pass through on prices and to ensure that electricity is affordable to our citizens. We recognise where we are at in the international table. With the departmental officials working with the CRU, it is very much our desire to get to a point where we can get parity in that situation.
It is clear that the Minister of State has had no update from the CRU on this. He provided no information or timeline on its examination of price gouging. It is incredible that six months after the IEA highlighted that wholesale electricity price reductions were not being passed on to Irish consumers at the same rate as other consumers across Europe and that five months after the Minister wrote to the CRU asking it to conduct an investigation into price gouging, the CRU cannot even give the Minister of State an update as to what it has done or when it will conclude that investigation.
What is the CRU doing? It is meant to be protecting consumers. Irish consumers are facing another energy shock when it comes to electricity prices. They are still trying to get over the incredible electricity prices that resulted from the Ukraine war. The CRU is asleep at the wheel here. I ask that the Minister of State meet with the CRU and direct it to immediately conduct this investigation into price gouging. We cannot wait any longer.
The Deputy is aware that the CRU is independent entity. It is answerable to the Oireachtas through the Oireachtas committee, so there is an opportunity there for the Deputy. In fairness to her, Deputy Whitmore is a very vocal and hard-working member of that committee. The Minister has written to the CRU, and the officials are in contact. We want to bring this to a conclusion, but we must also recognise the independence of the CRU. As already stated, the commission is answerable to the Oireachtas. Price setting by energy companies is a commercial and operational matter for the companies concerned and not something that the Government or the Department could or would be able to interfere with or influence. My suggestion, as I said at the outset, would be to engage with the CRU through the committee.
