Green Party set to make fresh push for windfall tax on energy companies

Ryan confirms contingency planning for power shortages, expects high prices to be bigger issue

The Green Party is set to make a renewed push for a windfall tax on power producers to help fund cost-of-living measures designed to offset increased energy costs for consumers.

Party sources said on Wednesday that the policy was something that the Greens wanted and would be pushing for during budget negotiations.

Green Party leader Eamon Ryan told RTÉ's News at One on Wednesday that the “real challenge” over the coming months was going to be the price of energy. While the Government had done more than its European counterparts to protect homes and businesses, “we’re going to have to do a lot more”, he said.

Mr Ryan, the Minister for the Environment, Climate and Communications, said further measures would be set out in the budget and the Coalition would “consider issues such as windfall charges”.

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A post on his Twitter account later stated: “We will implement a windfall charge on power companies to help pay for supports we will provide to households and businesses”.

The tweet, which appeared to refer to a tax decision, and would ultimately be a matter for Minister for Finance Paschal Donohoe to propose to Government for inclusion in the budget, was then deleted. It was replaced with a near-identical tweet which said “we will explore a windfall charge on power companies” to help pay for supports.

Business leaders have in recent days called for extraordinary taxes on the profits of energy firms, including the Irish Small and Medium Enterprises group. However, Mr Donohoe has been cool on the suggestion.

He has said such a move to target, for example, the profits of wind energy companies would run the risk of undermining investment in the sector, which is needed if the State is to become energy independent.

He has also said it could harm a small open economy reliant on tax certainty such as Ireland’s and warned there would be significant consequences to anything that might undermine that perception.

Mr Ryan confirmed on RTÉ that the Government was contingency planning for extreme scenarios such as power shortages, but said the more likely impact of the crisis would be high energy prices for consumers this winter. He said this winter and next would be a “very, very challenging situation” with the war in Ukraine driving the price of gas “beyond any precedent, beyond any compare”.

“It is a real challenge that the Government will be able to face up to and help this country through,” he said, vowing that the Coalition would “be able to keep the lights on”.

“We’re going to have to do a lot more [for] householders and businesses,” he said.

“It will have to be set out in the budget. It will have to consider issues such as windfall charges to help fund supports for households in very difficult times. To make sure we have the funds available to get through what is an unprecedented time in terms of the price shock that we and every other country is undergoing — that is the biggest challenge this winter. As well as keeping the lights on, we have to make sure that people can afford the power coming through.”

Mr Ryan acknowledged that there were other factors feeding into the supply equation and said that there were being addressed but that in the meantime there were shortfalls to be dealt with.

“There is a challenge. In energy policy you’re always looking to achieve three objectives:, you want secure power; you want affordable power and you want clean power,” he said. “I think, in getting the balance right and in retrieving all three objectives we will keep the lights on and we will get our country through what is a very difficult and challenging period.”

Emmet Malone

Emmet Malone

Emmet Malone is Industry and Employment Correspondent at The Irish Times