2026-02-24

144. Deputy Joe Neville asked the Minister for Climate, Energy and the Environment the measures his Department is taking to acknowledge the increased energy cost pressures on businesses; and if he will make a statement on the matter. [14815/26]

My question today is about the significant energy cost pressures that many have felt in recent months and the impact that has in particular on SMEs across the country. What measures is the Department taking to acknowledge the increased energy costs on businesses? Will the Minister of State make a statement in that regard?

Addressing energy affordability for businesses is a priority for this Government. We are committed to supporting businesses to become more energy-efficient, thereby strengthening competitiveness through reduced energy costs. In budget 2026, the Government extended the accelerated capital allowance scheme for energy-efficient equipment until 31 December 2030. It also approved the extension of the 9% VAT rate currently applied to gas and electricity to December 2030. This encourages investment in energy efficiency and low-emission technology. The Department also funds schemes administered by the Sustainable Energy Authority of Ireland, which provide various supports to enterprises that can assist businesses in increasing their energy efficiency. The 2026 allocation for these schemes amounts to more than €40 million. The Government has also introduced measures to reduce energy costs and unlock greater decarbonisation of Irish industry and enterprise over the medium term. For example, under the national development plan the Government has approved a significant equity investment, valued at €3.5 billion, in ESB Networks and EirGrid to support the financing of their ambitious capital investment plans of over €18.9 billion in the coming five years. The increased deployment of indigenous renewables, such as onshore and offshore wind and solar generation, will help to reduce dependence on imported fossil fuels and the associated price volatility. We are also supporting further interconnection with neighbouring jurisdictions, including the 700 MW Celtic interconnector between east Cork and France. In June of last year, the Department established the national energy affordability task force to identify, assess and implement measures that will enhance energy affordability for households and businesses while delivering key renewables commitments and protecting security of supply and economic stability. The task force seeks to support the objectives of the Action Plan on Competitiveness and Productivity, as well as other Government efforts and initiatives to alleviate the energy-related challenges businesses face, including through engagement with the cost of business advisory forum.

As part of the engagement at the climate committee - Deputy Pa Daly will attest to this - we had representatives of the business sector in talking about the barriers they face in transitioning and achieving climate targets. One of the points they raised was how little consideration is given to cost proofing of climate plans and transition measures to get across to a low-carbon environment, particularly for SMEs. They mentioned low visibility of costs for all the different plans and the affordability of the energy transition. They said they have difficulty when looking ten years down the line to see where their companies are going in terms of getting to a kind of low-carbon future. It is really important that the Government and the Department are very aware of that. They need to be aware that for businesses in particular, it is a challenge to get across that bridge. The Minister of State already mentioned the energy affordability task force. Is there a particular focus within that task force on SMEs, energy costs for business and priority measures? I accept the broader point about society at large, but I ask specifically about measures for SMEs that could be covered off.

I again thank the Deputy for raising these important matters. I am someone who has a dual role within the Department of enterprise, with responsibility for small businesses. The Minister, Deputy O'Brien, has engaged with the Commission for Regulation of Utilities to undertake an independent review into the speed and level of wholesale to retail price pass-through. That is really important because we need to ensure that there is transparency and fairness, but also that there is fair competition in pricing. We have had inherent structural challenges in Ireland such as our reliance on imported gas, our dispersed population and in other areas. It is important that through the national energy affordability task force we conduct a review on the cost drivers across the energy system, from infrastructure investment to market behaviour. That would feed directly into the energy affordability action plan because price volatility has never been as apparent, especially given the current geopolitical state. It is important that the Government identifies the structural barriers, but also that we bring forward measures around affordability for enterprises and SMEs and that they become a permanent feature of the Irish energy system.

I agree with that. The committee also looked at energy affordability in December. Interestingly enough, the ESRI was of the view that there was not a particular issue with price gouging because if there was, you would expect to see a lot of new market entrants into the Irish energy market if there was a lot of profit to be made. It did not seem to see that. It was an interesting observation from the ESRI at the time. Once again, I encourage a very sharp focus on the costs of the energy transition for small businesses in particular. The more we can do around bringing down those costs in the long term and keeping them down - for energy-intensive businesses in particular - the better. It is in everybody's interests to transition across for that kind of carbon-free future.

I thank the Deputy for his remarks. I certainly hear that. During the engagements at the cost of doing business advisory forum. That is very much looking at the structural needs within the energy system, but also how businesses analyse and interpret their bills. We are looking to get more details in regard to how bills are calculated. I will point to empowering businesses to control the controllables. That is exactly why we have a suite of measures through the SEAI. They are readily accessible, be it the business energy upgrade scheme. We also have the support scheme for energy audits. That can give businesses up to €2,000 per site visit. We have other programmes, such as the EXEED programme, which funds on capital investment. Together, working with the local enterprise offices, Enterprise Ireland, IDA Ireland and the cost of doing business advisory forum, we are very much committed to finding practical solutions and co-developing them to support our enterprise and small businesses.