I thank Deputy Daly and Sinn Féin for bringing forward this legislation. I am disappointed that the Government will not be supporting it. The Labour Party and I have long called for enhanced powers for the CRU. Indeed, I have my own electricity regulation Bill, which seeks to give the CRU the ability to issue specific emissions reduction or offsetting obligations on large energy users, like data centres. I hope we get the opportunity to debate that Bill on Second Stage in the House in the not-too-distant future.
I am broadly supportive of Deputy Daly’s Bill. There are elements that I think could use some strengthening, which I will come to, but on the whole, it is a noble endeavour. We are discussing this in the midst of what the head of the International Energy Agency has described as the worst ever energy crisis. However, the sense of dread with which people open their energy bills long proceeds Trump and Netanyahu’s illegal war in Iran. Low-income households, small businesses and pensioners are the cohorts that have been put to the pin of their collar for years now. Virtually everyone is being touched in some way by this fossil fuel crisis. While the Government has produced a €750 million package, however necessary it was, it was designed to placate sectoral interests. It has done next to nothing for ordinary PAYE workers, certainly not those who take public transport, cycle or walk every day. The Government has resisted every effort from the Labour Party, including the costed mini-budget that we proposed last week, to give workers a dig-out during this perpetual cost-of-living crisis.
This Bill seeks to amend the 1999 Act in several important ways, which have already been outlined by Deputy Daly and others. The governance and mechanisms of the energy markets are convoluted and complex, to say the least. We cannot expect the average consumer to know the ins and outs. That is hard enough for those of us in here, whose job it is to understand it. In that respect, greater transparency in energy pricing is necessary and good. Stronger consumer protection is necessary. Better scrutiny of suppliers is necessary. Affordability must be recognised as a core public policy objective, not just an afterthought.
The provisions in this Bill would set us in the right direction. I suggest that we could perhaps go even further. I am on record on a number of occasions as not just calling for greater regulation in the energy markets but also for greater intervention and a crackdown on some of the profiteering we have seen on the part of the energy companies. The Irish energy system is dominated by a relatively small number of large actors. The liberalisation of our energy markets in the early 2010s was supposed to bring about lower prices through greater competition. That clearly has not happened. Instead, we have repeatedly seen cartel-like behaviour from the companies operating here. When international energy prices rise, bills fly up immediately. When wholesale prices fall, however, consumers wait months or even longer to see any meaningful reduction in the prices they pay.
This fundamentally undermines public trust in the energy markets. People know they are being ripped off. This Bill proposes enhanced monitoring of wholesale and retail prices, including average supplier margins and changes in prices paid by domestic and business consumers. That is a welcome proposal. Transparency matters. The public deserves to know not just what prices are being charged, but why they are paying them. There has virtually always been insufficient visibility with regard to supplier margins and the relationship between wholesale costs and retail prices. Consumers have basically been asked to accept on trust that price increases are unavoidable and proportionate. That is not good enough, particularly in the current context of market volatility.
If a supplier claims that international gas prices necessitate major increases, then the CRU should have the capacity - indeed, the obligation - to rigorously scrutinise that claim. We know there is an active investigation being carried out at present by the CRU into price gouging and the failure of energy suppliers to pass on wholesale price reductions to consumers. The wholesale cost is down 72% from its peak in August 2022, but the prices being paid by consumers remain stubbornly high. It has been more than five months since that investigation was commissioned by the Minister, and we are still to get any update from the CRU on the progress of that investigation. That says to me there is something seriously lacking in terms of the CRU’s capacity to investigate matters such as these. Crucially, we must also see statutory powers for intervention where unjustified pricing practices are identified. Transparency cannot become a substitute for action or accountability. lf that investigation eventually finds that there has been price gouging, what then? It cannot just be another report to add to the pile, and let that be the end of the matter.
The Bill also addresses hedging. This is one of those technical issues that is probably quite remote from the concerns of ordinary consumers, but it is really important because different hedging strategies directly affect the prices people pay. In theory, hedging allows suppliers to protect themselves and, potentially, consumers from market volatility by purchasing in advance at agreed prices. Done responsibly, it can provide stability and predictability. However, we have seen the lack of transparency in this process create legitimate public concern. Consumers have repeatedly been told during periods of falling wholesale prices that suppliers remain tied into earlier purchasing arrangements and, therefore, cannot yet reduce bills. However, as we know from very recent examples, energy and fuel suppliers are very quick to hike their prices during periods of wholesale price increases, despite having purchased their supply weeks or months prior. Consumers cannot hedge their bills or protect themselves against sudden price spikes. Therefore, stronger oversight of hedging practices, including investigative practices and powers for the CRU, would be very welcome. We need to ensure that what people are paying reflects what it costs the supplier.
The provisions in the Bill regarding anti-competitive behaviour are welcome. This goes back to my earlier point about the state of competition between actors in the Irish energy market, which is highly concentrated. Consumers do not experience this market as competitive in the everyday sense of the word. Most providers offer more or less the same high prices with minimal variation, and all too often, a price hike by one precipitates a price hike by the rest. We saw this last year, when more or less all of the energy companies raised their prices well above the rate of inflation.
Barriers to switching between providers have increasingly become an issue, particularly for more vulnerable households, like older people, people with disabilities and those with limited digital literacy or access. That reality needs to be recognised. It is not enough to tell people that the burden is on them to switch. We need to have real competition in the market. If a market is technically competitive but practically inaccessible, then many consumers remain unprotected.
Energy should not be viewed simply as a commodity. It is an essential public good. Electricity is not a luxury. Heating is not optional. When people cannot heat their homes, we see the consequences, be it in public health, child poverty, educational outcomes or mental well-being. I have dealt with people in my constituency who have gotten sick because they have not been able to heat their homes, and people who have skipped meals in order to pay their bills. These are not exceptional cases. They are the far too common reality of so many people in this country at present.
I welcome the consumer protection elements that are included in this Bill, and welcome that the interests of the consumer and protection against unfair pricing would be central considerations, but we also need to clarify what that looks like in practice. Does it mean clearer information on bills? I certainly hope so. Does it mean stronger enforcement powers? Absolutely. However, it surely must also mean preventing energy poverty before it actually occurs. Fundamentally, that means wider structural reforms in our energy system. As I have said on numerous occasions, the only way we can genuinely protect consumers from future fossil fuel crises is by reducing our dependence on those fossil fuels in the first place.
I will continue to bang the drum on this for as long as I need to because the Government has been moving at a snail’s pace. We need to see a much greater level of ambition in our home retrofitting programmes. We need to see low and middle-income households targeted in particular. We need to rapidly scale up public investment in offshore wind, solar, plug-in solar and battery storage. We need to accelerate grid modernisation while ensuring that the large energy users, like data centres, pay their fair share. At present, the bulk of the funding for grid improvements comes from ordinary households and small business consumers through their energy bills. Meanwhile, data centres are getting a discount. Working people are being asked to bear disproportionate costs in order that large corporations can continue to make massive profits. In order to make the energy transition a reality, we need to improve and modernise the national grid, but we cannot make this a choice between climate action and affordability. The two can and must be pursued together.
One of the great failures of recent years has been the inability of successive Governments to communicate that renewable energy, energy efficiency and public investment can reduce household costs. Instead, many now associate climate action with an additional expense because the big polluters and the large energy users have not been paying their fair share and properly contributing towards a just energy transition.
lf our transition towards a cleaner economy and society is perceived as something imposed on ordinary workers while wealthier actors remain insulated, public support will fracture. Perhaps that is already happening. Affordability must be central to our energy policy and our energy transition. A functioning energy system must be measured in terms of whether people can actually afford to heat and power their homes. In a country as wealthy as ours on paper, it is just unacceptable that for so many that isn’t the case.
We in Labour acknowledge that our energy challenges do not exist in isolation. The volatility experienced in recent years obviously reflects broader geopolitical instability, but external factors cannot excuse the local inertia we have seen from the Government. Countries with stronger public infrastructure, greater energy independence and more developed renewable generation capacity have been able to weather this storm far more effectively. Look at Spain. Following the fuel crisis that arose as a result of Putin’s illegal war on Ukraine, they turbo-charged their solar energy capacity and have been largely protected against this current crisis. They are paying some of the lowest prices in Europe now. While Spain took that fossil fuel crisis as a wake up call, our Government hit the snooze button. We remain overly dependent on imported fossil fuels. We remain vulnerable to international price shocks. Despite our enormous potential in offshore wind generation, we still have not added a single additional turbine in more than 20 years, and the Minister has told us again tonight that we will not see anything in construction until 2030 at the earliest. The only urgency that we have seen from the Government with regards to our energy system is in its attempt to import even more fossil fuels via a new liquefied natural gas, LNG, terminal. I sincerely hope that this Government takes the right lessons from this crisis, the ones that it did not take from the crisis in 2022.
I will conclude by again commending Deputy Daly on his Bill. It poses an important question to the Government about what kind of energy system we want in Ireland - one in which energy is treated as a commodity subject entirely to commercial logic, or one in which it is treated as a public utility and social good. My Labour Party colleagues and I certainly favour the latter and we will be supporting this Bill.
