Sinn Féin spokesperson on Environment and Climate Action, Darren O’Rourke TD, has criticised as ‘wholly inadequate’ the government’s plans to address the exorbitant profits of energy companies via a windfall Temporary Solidarity Contribution and Cap on Market Revenue.

Calling on them to re-examine their plans and urgently change tack, the Meath East TD says the government’s current approach is continuing to protect energy companies and their profits at a considerable cost to ordinary families, workers and businesses.

Teachta O’Rourke said:

“Energy companies reported record profits in 2022 at a time when a cost of living crisis raged. That crisis continues to rage. Prices reached record highs, with families and businesses suffering the worst effects.

“For many energy companies, their profits soared to multiples of previous records. The figures are frankly eye-watering and obscene.

“Despite this, today, as we began pre-legislative scrutiny of the Energy (Windfall Gains in Energy Sector) Bill 2023, we have confirmation that the Government’s plan will leave the vast majority of those eye-watering and obscene profits untouched.

“As we know the windfall tax will be made of two elements – a ‘Temporary Solidarity Contribution’ from gas producers and refineries on 2022 and 2023 profits, and a ‘Cap on Market Revenues’ for non-gas generation to apply from December 2022 to June 2023. 

“The Cap on Market Revenues is especially important for Ireland given the relative amount of wind and solar, in particular, on our grid.

“The constraints of the EU regulation mean estimates of proceeds from these measures has been revised down very significantly; from €280m-€1.4bn to €80m-€150m for the Cap on Market Revenues, and from €60m-€480m to €200m-€450m for the Temporary Solidarity Contribution.

“To state that clearly, the estimated proceeds from the Cap on Market Revenues, has been revised down by almost a factor of ten. This is completely outrageous. 

“The public will be outraged to learn that this proposed windfall tax is so weak. They will be outraged to learn that the obscene profits of renewable energy generators for 2022 will go untouched, save for the month of December. 

“We must remember that wholesale gas prices were at their highest ever between April and August last year. At that time, as now, renewable energy companies were getting paid the price of gas for their wind and solar energy.

“Other EU member states have recognised the weakness of the EU regulation and moved to tackle energy company profits prior to December 2022. Austria, France and Belgium, for example, will do this by way of new tax measures. 

“As confirmed by the European Commission’s representative at today’s Oireachtas Climate Committee meeting, this option is open to the government here.

“The government here needs to strengthen its windfall tax proposals. They are wholly inadequate in their current form. There will be opportunity to strengthen the proposals as we move through the legislative process in the time ahead. 

“At this juncture, however, it is essential that the government act urgently to identify suitable policy measures to tackle the obscene profits of energy companies prior to December 2022. The efforts of European counterparts may provide a template.”