From Department of the Environment, Climate and Communications
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The Minister for the Environment, Climate and Communications, Eamon Ryan, today announced the publication of the Energy (Windfall Gains in the Energy Sector) (Cap on Market Revenues) Bill.
This Bill provides for a cap on the market revenues generated by non-gas generators in the wholesale electricity market between December 2022 to June 2023 inclusive, as set out in Council Regulation (EU) 2022/1854.
The estimated proceeds from the cap on market revenues are in the range €80 million to €150 million. These proceeds will be retained and used in the electricity sector to provide financial supports to households and businesses affected by high energy prices.
The publication of this Bill follows the enactment of the Energy (Windfall Gains in the Energy Sector) (Temporary Solidarity Contribution) Act 2023 last month. Companies that fall within the scope of this had to register with the Revenue Commissioners by 30 August, and will have to file their return and pay the 2022 Temporary Solidarity Contribution by 23 September 2023.
In total, it is expected that windfall gains across the Temporary Solidarity Contribution and the market cap can raise between €280 million and €600 million, dependent upon wholesale gas prices, to support householders and businesses, and climate actions.
Minister Ryan said:
"I welcome the publication of this Bill. It will result in the collection of significant revenue that will be used to ease the impact of high energy prices on electricity consumers."
The Minister has also announced his intention to bring this Bill through the Houses of the Oireachtas when the Dáil resumes after the summer recess.
The Bill contains the timelines under which companies are required to make formal declarations and payments to the Commission for Regulation of Utilities (CRU). These are as follows:
The war in Ukraine has led to significant increases in wholesale natural gas prices. As a result, consumers are paying higher prices for gas and electricity. High wholesale gas prices have also led to windfall gains for some entities in the fossil fuel production and refining sectors, and in the electricity sector.
On 22 November 2022, the government announced measures to address windfall gains in the energy sector through the implementation of Council Regulation (EU) 2022/1854. The measures were the Temporary Solidarity Contribution on fossil fuel production and refining and a Cap on Market Revenues on certain electricity generators.
The Energy (Windfall Gains in the Energy Sector) (Temporary Solidarity Contribution) Act 2023 came into effect on 2 August 2023. This Act provides for the implementation of the temporary solidarity contribution outlined in Council Regulation (EU) 2022/1854 of 6 October 2022 on an emergency intervention to address high energy prices.
The Temporary Solidarity Contribution will:
The proceeds to be raised by the Temporary Solidarity Contribution are expected to be in the range of €200 million to €450 million. These estimates continue to remain highly sensitive to wholesale gas prices, which can be driven by weather, gas storage levels, developments of the war in Ukraine, for example.