Dáil Éireann Debate, Thursday - 16 October 2025
151. Deputy Ciarán Ahern asked the Minister for Climate, Energy and the Environment the way in which emergency market adjustment charges, which were introduced by energy companies following Russia’s invasion of Ukraine, were calculated; and if he will make a statement on the matter. [56144/25]
Amharc ar fhreagraThe cap on the market revenues of certain electricity providers was introduced under the following legislation, the Energy (Windfall Gains in the Energy Sector) (Cap on Market Revenues) Act 2023.
The legislation implemented the emergency interventions introduced by EU Council Regulation 2022/1854, which aimed to protect energy users from significantly increased electricity prices following the invasion of Ukraine. The Act capped the revenues of energy companies operating within the State. Surplus revenues were directed to a market cap fund, to be disbursed in the form of measures to support final electricity customers.
The setting of the cap and the calculation of the surplus revenue to be collected were provided for by Part 2, Chapter 1 of the 2023 Act. Section 6 specified the persons liable to make payments, namely, licensed producers of electricity with a capacity greater than one megawatt, authorised intermediaries of such producers and persons authorised to sell electricity on behalf of producers. Section 7 listed the sources of electricity production subject to the cap.
Section 8(2) specified various figures for the market cap in cost per megawatt hour, depending on the source of electricity production. The cap was set at €120 per MWh for wind, solar and hydro-based generators; €180 per MWh for other non-gas generation such as geothermal, waste and lignite; and a variable cap was set for electricity from sources with variable cost structures, including biomass and peat.
Under section 9, the collection agent was required to publish a “market index price”, a weighted average price of a quantity of electricity traded in the day-ahead and intraday markets for each month of period during which the legislation was in force. With reference to this figure, sections 10, 11 and 12 outlined a set of rules for the calculation of “adjusted surplus revenue”, the amount which a producer, intermediary or trader was liable to pay in respect of the market cap.
It should be noted that EU Council Regulation 2022/1854 envisioned “exceptional, targeted and time-limited measures” and included an explicit time limit. This reflected a policy aim of preserving price incentives to reduce energy demand and save energy, enabling energy producers to recover their investment and operating costs and incentivising investment in a decarbonised and reliable electricity system. Accordingly, the 2023 Act enabled a cap on market revenues to be applied for the period beginning on 1 December 2022 and ending on 30 June 2023.
