Energy and Fuel Costs: Motion
Seanad Éireann — 2026-09-29
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Alan Dillon (FG), Mayo

I thank all the Senators for raising these important matters and welcoming the opportunity to discuss the continued high cost of fuel and energy costs for households and businesses. As referenced by many of them, the conflicts in the Middle East and Ukraine have caused significant disruption to global energy markets. The Government indeed recognises that these pressures are resulting in high energy prices and are placing Irish consumers and businesses in a vulnerable and difficult state.
This Government understands that any price increases can place significant pressures on households and business budgets. As a result, we have been proactive and introduced a series of measures to reduce fuel prices,and further measures are under consideration by the national energy affordability task force as part of the budgetary process. Specifically on fuel, the package of Government support measures, which now totals over €1.4 billion, is helping to reduce the cost burdens at the petrol pumps and in assisting key sectors such as agriculture, haulage and transport which are critical to keeping our economy moving.
A range of measures in last year's budgets also supported households with energy costs, which included an extension until 2030 of the 9% VAT rate on the gas and electricity bills. We also enhanced social protection payments including an increase in the fuel allowance rate and an expansion in eligibility rules, as well as a €400 income disregard for households involved in microgeneration, which has extended for a further three years until the end of 2028. The best way of insulating our economy and society from future fuel price shocks is to reduce our dependence on fossil fuels. This is why we are investing record amounts in retrofitting, both through part- and fully-funded schemes. Budget 2026 also provided a record allocation of over €640 million for the Sustainable Energy Authority of Ireland residential and community grant scheme. That is allowing us to target over 75,000 home energy upgrades this year.
In January of this year, we expanded and reformed retrofitting schemes to ensure more homeowners can receive grants. The new measures included increased attic and wall insulation supports, an increased grant of over €12,500 for heat pump installation and new grants for windows and doors. Simple upgrades like attic insulation, cavity wall insulation or external wall insulation can reduce heating bills by up to €230 annually. A full home retrofit can lead to savings of €750 to €1,120 per year on energy costs. Almost 89,000 applications have been processed up to the end of August of this year. That compares with 41,100 applications received to the end of August of last year. That saw a 116% increase year on year and follows changes to the schemes that the Minister, Deputy O'Brien, introduced earlier this year. Capital expenditure of over €2 billion has delivered over 287,000 home energy upgrades from 2019 to the end of August of this year, including over 39,500 fully funded upgrades for households at risk of energy poverty under the warmer homes scheme.
As of the end of August of this year, the domestic solar PV scheme has supported 21,000 homes to install solar PV panels this year and over 35,000 applications have been received. That is a 72% increase in applications year on year and indicates that the scheme is working well and that householders are recognising the benefits of investing in solar PV.
While these are all positive indicators, this Government is very conscious of the price increases in home heating oil. Kerosene prices increased from approximately 95 cent per litre before the conflict to €1.77 in April of this year. The current average price is around €1.62 per litre. The conflict in the Middle East has resulted in economic pressures that can be felt far beyond the countries involved and has severely impacted the cost of kerosene for many households. In order to ease the financial burden on households, earlier this year the Government extended the fuel allowance by four working weeks, resulting in additional payments of €152 to each of the 470,000 fuel allowance recipients. This Government also deferred the planned increase in carbon tax on home heating fuels, which was due to occur on 1 May, until 14 October to help mitigate price increases. I appreciate that people living in rural Ireland are twice as likely to use home heating oil as their main heating fuel. According to the latest CSO figures, around 26% of households in Ireland use it as their main heating fuel. That is around 500,000 households. This Government understands that these are disproportionately older households, disproportionately rural and, in a lot of cases, low-income households. Many of these households would be eligible for the aforementioned fuel allowance. The Government is also very conscious of those who use home heating oil but do not qualify for the fuel allowance payment. That is why in the upcoming budget we also want to deliver for middle-income families.
The Government is examining the different levers available to it in relation to the cost of home heating oil. There will be an energy tax package as part of budget 2027. The final composition of this is under consideration.
This Government is also acutely aware of the pressures arising for the agriculture sector, which has been referred to in this House this evening, as a result of prolonged high fuel prices, high fertiliser prices and additional fuel costs, and we will deliver a strong budget to protect farmers, fishers and foresters, helping to secure the future of our agrifood sector. The agrifood sector has demonstrated its ongoing resilience despite current uncertainties, rising fuel and fertiliser costs and challenging weather conditions. Payments are continuing under the fuel income support scheme, with a spend of over €26 million to more than 30,000 applicants to date, and under the areas of natural constraints scheme this Government has delivered €179 million in payments to over 85,000 farmers.
A specific €15 million tailored fuel support scheme for owners of registered vessels in the fisheries and aquaculture sector has been developed, with payments to date of more than €10 million under the fishing and aquaculture registered vessel fuel support scheme and the aquaculture business vessel fuel support scheme.
To support our hauliers and road transport operators, the Government also increased the maximum repayment allowable under the diesel rebate scheme, from 7.5 cent up to 12 cent per litre of diesel, backdated to January. This currently applies until 30 September 2026 and is to help temper inflation on food and public transport costs. It is the Government's intention, as part of budget 2027, to extend this timeframe to give continuing support to these sectors.
At a time of real global energy uncertainty, it is now more important than ever to continue to develop and accelerate the deployment of indigenous renewable resources and associated grid infrastructure to provide long-term energy security and price stability for Irish households and businesses. The programme for Government reaffirms Ireland's target of 80% of electricity demand to be met by renewables in the near term, with plans to move to net zero by 2050. We have made substantial progress in the development of renewable electricity capacity in recent years, doubling our wind capacity and establishing a thriving solar industry. Accelerating and increasing the deployment of renewable electricity generation, especially onshore wind and solar, is fundamental to our transition to a renewables-led system. We have now reached over 8.7 GW of renewable generation capacity, up from 4.8 GW in 2020. This growth in renewable electricity capacity has been supported by Government policy measures such as the renewable electricity support scheme, the small-scale renewable electricity support scheme and the microgeneration support scheme. We are also investing record funds in ensuring our electricity grid is fit for purpose. That is a key priority for this Government.
In relation to an EU-wide windfall tax, the European Commission published its AccelerateEU communication in April of this year. It addresses the EU's rising energy costs and volatile fossil fuel markets and aims to accelerate the clean energy transition and strengthen EU energy resilience. While the communication notes member states may take domestic measures, no EU-wide approach has yet been agreed.
Previously, the temporary solidarity contribution, TSC, was introduced in line with Council Regulation 2022/1854 of 6 October 2022 to tackle windfall gains being made in the energy sector at the time, following the commencement of the war in Ukraine. The TSC formed part of a co-ordinated response, reflecting the highly interconnected nature of EU energy markets - when we acted, we did so at an EU level - and a view that an emergency intervention to mitigate the effects of high energy prices at the time could not be sufficiently achieved by member states individually.
The national energy affordability task force is working intensively on an energy affordability action plan to be submitted to the Government in the coming weeks. We are very much focused on short-, medium- and long-term measures to support households and businesses to meet their energy costs. It continues to be the Government's view that tackling the energy crisis in a co-ordinated way between EU member states is best, given the interconnectedness of energy markets. We are working with member states to achieve that.
The Government has introduced substantial supports - as I said, €1.4 billion to date - during this volatile period. They are timely and necessary, and we will continue to monitor the situation. Ultimately, we need to reduce our reliance on expensive fossil fuels if we are to reduce energy costs in the long term. Tough decisions will need to be made during this budget. We are very fortunate that we are in a very strong position due to a strong economy. The way out of fossil fuel dependency and high energy costs is a shift in electricity generation to renewables.
That is what the Government is supporting.
Again, I commend the Senators on bringing this motion to the House and thank them for their contributions.

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Record URI: https://data.oireachtas.ie/akn/ie/debateRecord/seanad/2026-09-29/debate/main
Retrieved: 2026-10-05T01:00:59+00:00
Sitting date: 2026-09-29