The energy crisis will last at least two years, which means that Ireland will have to ensure an adequate supply of natural gas next winter as well as this one, according to Environment Minister Eamon Ryan.
Speaking as he arrived for an emergency meeting of energy ministers in Brussels, Mr Ryan said it would take time to bring down the price of electricity.
Energy ministers from the 27 EU member countries are negotiating measures proposed by Brussels last week to try to contain a spike in energy prices that is fueling record inflation and threatening recession.
They include a levy on the excess profits of fossil fuel companies made in 2022 or 2023, another levy on the excess revenues that low-cost power generators derive from soaring electricity costs, and a mandatory reduction in 5% of electricity consumption during peak periods.
Mr Ryan said: “As we look to other supplies [of gas] rather than Russian supplies, there will be a moderating impact on the price.
“But over the last few months we have realized that it will be a two year challenge, not a one year one. This is not a winter we have to fight for, we have to think about how we provide [for] and also protect the following winter. And that should influence the approach we take to having reserves, and that’s why unity is important.”
The minister said he supported plans by the European Commission to accept an exceptional tax on energy generators using non-carbon sources.
“They allow us to take some of the excess profits that are going to the energy industries and bring them back to help our people.
“Every country has slightly different circumstances, but this general principle – that unfair profits caused by a war, not by the action of any company, should be reintroduced to help people pay their bills. I believe the commission text does.”
Mr Ryan also said member states could not cushion the whole blow. “There will always be a higher cost, even if a lot of those windfall gains are recycled, that still leaves a pretty high price tag.
“So we have to be energy efficient – but we also have to help our employees and our businesses.”
He said Europe had paid a very high price for gas because it needed to quickly fill storage tanks, but that situation could change. Europe also needed to coordinate more closely with gas-exporting countries and gas-consuming countries.
“We also have to work internationally. We have to work with some of the supplier countries – Norway, UK, America. We have to work with other big consumer countries like Japan, Korea, because we are in the LNG market”.
Earlier, the minister said he expects a windfall tax on energy companies could bring in between €1 billion and €2 billion.
Speaking on RTÉ’s Morning Ireland, he said: ‘How much is collected depends on a whole range of issues, including the international gas price in particular.
Minister Ryan said the government will continue to review how the budget measures are being implemented.
“We don’t want anyone to be cold,” he said, or face real acute fuel poverty this winter.
Diplomats from several countries were confident ministers would approve the package today.
Afterwards, ministers will turn their attention to the EU’s next move to contain the price crisis – which many countries say should be a wide gas price cap, while others – notably Germany – remain opposed.
“On price caps, there is nothing close to a consensus,” said a diplomat from an EU country.
Fifteen countries, including France, Italy and Poland, asked Brussels this week to propose a price cap on all wholesale gas transactions to contain inflation.
Europe should cap gas prices at a level “sufficiently high and flexible to allow Europe to attract the necessary resources”, Belgium, Greece, Poland and Italy said in a note explaining their proposal, seen by Reuters last night.
Opponents include Germany and the Netherlands, which say gas price caps could prevent countries from attracting supplies if they cannot compete with buyers in world markets at competitive prices for cargoes. gas this winter.
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A diplomat from an EU country said the idea presented “significant weaknesses and risks to security of supply” as Europe heads into a winter with little energy to spare, after Russia cut gas flows to Europe in retaliation for Western sanctions against Moscow for invading Ukraine. .
The European Commission has also expressed doubts and suggested the EU move forward with more limited versions of a price cap.
A wholesale gas price cap would require “significant financial resources” and could only work if a new entity was launched to allocate and ship scarce fuel supplies between states, the Commission said in a document released yesterday.
EU countries should instead consider capping the price of Russian gas or launching an EU price cap specifically on gas used for power generation, he said.
The Commission suggested a cap on Russian gas prices earlier this month, but scrapped the idea after resistance from central and eastern European countries feared Moscow would retaliate by cutting off the remaining gas it still sends them. .
Belgian Energy Minister Tinne Van der Straeten said countries in favor of the price cap would step up their efforts to find a proposal that more EU countries could support.
“We will take other steps with Germany, with Austria, with all those countries which today still have reservations,” she said yesterday.
She added that only €2 billion would be needed to fund emergency gas purchases if prices exceeded the EU cap, as most European imports are under long-term contracts and/or arrive via pipelines. without other easy buyers.
That, she said, pales in comparison to the sums spent by individual EU countries to help their consumers cope with runaway prices.
Berlin yesterday put in place a 200 billion euro “defensive shield”, including a gas price curb and a fuel sales tax cut, to protect German businesses and households from the impact of soaring energy prices.
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