“Government should fully avail of Commission suggestions for tackling electricity prices” – Chris MacManus MEP

“On 8th March, the European Commission gave the green light to a series of measures to tackle rising electricity prices. The Irish government must make full use of these options to give people a much needed break in the midst of the cost of living crisis,” said Chris MacManus, Sinn Féin MEP for the Midlands Northwest. 

Speaking in Brussels after the Commission’s announcement, MacManus called on the government to “fully take on board and implement these measures, in a manner appropriate to our national context, in order to shield households from rising electricity prices.” 

“The European Commission’s REPower EU communication sets guidelines for Member States to set fixed retail prices for electricity, and to collect a windfall tax on excess profits of electricity suppliers. Regulated electricity prices are already allowed under EU legislation, where justified by an emergency situation. With this communication, the Commission has confirmed that we are facing such a crisis situation, and that price fixing is warranted in view of the harm being done to consumers as volatile energy prices are being directly passed on to consumers in their electricity bills. This is a welcome clarification and the government should now thoroughly investigate the options for temporarily fixing retail electricity prices. These should be accompanied by measures to enable self-production and consumption of renewable energy, energy efficiency and demand-side flexibility.”

“Elsewhere in the Communication, the Commission commits to looking into all possible emergency measures to contain the energy price crisis, including setting temporary price limits and considering changes to the design of the electricity market. The government should engage proactively with the Commission on this topic over the coming weeks, to advocate for measures that will best protect households from further price increases.”

“The other key suggestion from the Commission is a windfall tax on electricity company profits caused by the gas crisis. Due to the marginal pricing system of the electricity market, the wholesale price of electricity is often significantly higher than the production costs faced by electricity suppliers. The International Energy Agency estimates that energy companies will make €200 billion in excess profits across the EU in 2022. While a windfall tax should be designed so as not to diminish the incentive for renewable energy production, there is scope for a temporary redistribution of these windfall profits, with the revenues going towards lifting the burden of rising energy prices on consumers and small businesses. I urge the government to take on the Commission’s guidance on this issue and to evaluate the feasibility of a windfall tax on electricity generators and their parent companies.” 

“As energy prices spiral out of control, it is clear that small steps and half-hearted responses are not enough,” concluded MacManus. “We are facing a crisis and we have a clear set of tools available to address it. It is time for urgent and far-reaching action.” ENDS