Energy crisis: Leo Varadkar signals government will help households with bills next year

TÁNAISTE Leo Varadkar has signaled that the government will help households with their energy bills next year.

r Varadkar said it cannot be assumed that the current energy crisis is short-term and helping people before Christmas is not enough.

Speaking at the start of the Fine Gael Think-in in Kilkenny on Friday, he said: “One thing I’m very aware of is that electricity bills land every few months.

“So I don’t think it will be enough to help people before Christmas. People will continue to need help after Christmas and perhaps throughout next year and we have to remember that it is possible.

“But again, that’s all a reason not to spend all the money now and empty the tank because we just can’t say how long this is going to go on and we need to hold money in reserve to step in again, not only into the new year, but maybe also in the years to come, if need be.”

Mr Varadkar said he couldn’t say if that would mean paying three or more energy credits in the coming months, but said there was no point in helping people with their bills before Christmas and not beyond “and then in the to say new year, in the spring, next winter, if it’s just as bad, well, now you’re alone. That is incomprehensible to me.”

He later added that the government must “react dynamically” during the year, as it did in 2022 with the cut in the consumption tax, the €200 energy credit and the increase in student grants and school fees.

“What I’m saying is that the budget day announcements are not the last word on this. If we need to intervene sometime in 2023 and help people more, then we will,” he said.

Mr Varadkar said EU proposals to convert some of the windfall profits from power generation companies into price cuts for consumers were backed by Ireland.

“If that works, then the amount of money we have to give people with their bills is less because the bills go down,” he said.

He said the government also needs to be aware of what other countries are doing, including the UK’s energy price cap. “I don’t want our companies to compete with companies in Northern Ireland, for example, who have a price cap when we don’t have one here,” he said.

On other budget priorities, Mr Varadkar said the government wants to see “decisive action” to reduce household childcare costs and is targeting a 50 per cent reduction in fees over the next two years.

Earlier, the Tánaiste said it “makes sense” for Ireland to store liquefied natural gas (LNG) and Environment Minister Eamon Ryan will present storage proposals in the coming weeks.

It comes as Minister Ryan and the Greens have firmly rejected proposals to install an LNG terminal at Shannon Airport.

Mr Varadkar said Ireland was fortunate to have “good energy security” via the Corrib gas fields and pipeline from the UK and Norway, but adding storage was “reasonable”.

“So it makes sense to me that we should have LNG energy storage. How you do that is up for debate, but Minister Ryan will be presenting proposals over the next few weeks on how we can achieve that. That at least gives us added reassurance that if anything goes wrong from the interconnectors to the UK, we have our own way of getting gas out of the sea and storing it somehow,” he said.

Speaking of RTÉ Tomorrow IrelandMr Varadkar said the Greens are not endangering the country’s energy security, adding: “You will see the proposals that the leader of the Greens will make to improve our energy security by envisaging LNG storage here in Ireland.”

On the same programme, Minister Ryan confirmed he would be presenting energy storage proposals but said they would be based on “the interest of the Irish people and not in the interest of any individual developer or company”.

“We are part of a different gas market than the rest of Europe because we are connected to the UK and Norway, not the continent. I believe we have and will have storage, but I think we’re doing it in a way that gives us real security, not just for something that’s in the interest of a single developer,” he added.

Minister Ryan said the government would “do everything it can to keep the lights on” in the coming months and part of the plan will be to adopt the EU Commission’s proposals to deal with the energy crisis.

“There are three proposals that I think are in line with what we wanted to achieve as a government,” he said.

“The first is to take some of the revenue, the excess profits that some people are making in the electricity market. Not because of anything they’re doing, but because the price of gas is so high, and recycle that money, take that money and use it to help households.

“Second, the gas markets that we are similarly taking some of the excess profits to cover the hit to businesses and households and also considering a cap or cap on international gas sales to try and mitigate what the Russians do.

“Third, to try to help us reduce our peak demand, which is another opportunity to cut costs.”

Minister Ryan added that ‘capping bills’ as introduced in the UK are ‘not appropriate’ in the Irish context as ‘tax holders’ end up paying.

European Union energy ministers are meeting this Friday to strike an agreement on how to protect citizens from sky-high energy prices and avoid the collapse of energy suppliers as Russia has gradually halted gas supplies to Europe amid a dispute over Ukraine.

EU diplomats say member states broadly support proposals to help energy suppliers avoid being crushed by a liquidity crisis but are at odds over plans to cap Russian gas prices.

Russia, which supplied Europe with a third of its gas supplies until its invasion of Ukraine sparked a crisis, has said it would halt supplies entirely if a cap is imposed.

Ministerial talks on Friday aim to narrow down options for those with broad support before coming up with formal proposals, rather than making a final decision.

“We are in an energy war with Russia,” said Czech Industry Minister Jozef Sikela, arriving at the emergency meeting in Brussels. “We must send a clear signal that we will do everything we can to support our households and our economies.”

Energy bills, already rising sharply as demand for gas recovered from the Covid-19 pandemic, rose even further after Russia invaded Ukraine and the West imposed sanctions on Moscow. Governments have tried to limit the price shock.

The European Commission has proposed offering emergency liquidity to energy companies facing rising collateral requirements, a move diplomats say has broad backing from EU governments. Some also support proposals to curb electricity demand.

“I’m pretty sure we will align on liquidity measures to help businesses,” Sikela said, adding ministers would seek an agreement to “calm the markets and not make them nervous”.

But diplomats said the price cap proposal was divided, and some said it would not help as Moscow’s supplies to Europe have plummeted. Some Central European countries that still purchase Russian gas fear losing it entirely.

“There isn’t that much Russian gas coming to Europe, so I don’t see any value in it (a Russian gas price cap),” Belgium’s Energy Minister Tinne Van der Straeten told Reuters.

The Baltic states support the idea, saying a cap would deprive Moscow of money to fund military action in Ukraine.

“Russia has said if you want our gas, break sanctions. This is extortion. We cannot back down, we must be united, we must have the political will to help Ukraine win,” said Estonian Economy Minister Riina Sikkut.

An idea to reclaim revenue from non-gas power producers and spend the money on lowering consumer bills has also drawn opposition in some European capitals.

The EU proposal envisages capping the price of electricity for non-gas generators at 200 euros per megawatt hour and, according to a draft, applies to wind, nuclear and coal-fired generators.

France, home to Europe’s largest fleet of nuclear power plants, questioned whether the same limit should apply to all generators.

At the start of their meeting, EU ministers will observe a minute’s silence in memory of Queen Elizabeth, who died on Thursday after 70 years on the throne. Energy crisis: Leo Varadkar signals government will help households with bills next year

Fry Electronics Team

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