Energy crisis will last two years, warns Environment Minister

Environment Minister Eamon Ryan has warned that the energy crisis will last two years.

It comes as EU countries agreed to implement a windfall tax on energy companies in a bid to tackle soaring energy prices across the continent.

Energy ministers held a meeting in Brussels on Friday morning to approve the emergency measure.

The Green Party leader said the emergency tax could raise up to two billion euro for Ireland to help consumers and businesses with rising energy bills.

But he warned it will not cushion the entire blow for households.

Mr Ryan made the comments as he arrived for the EU meeting in Brussels.

He said: “As we turn to other supplies (of gas) rather than Russian supplies, there will be a moderating impact on the price.

“But, in the last number of months, we’ve realised this is going to be a two-year challenge, not a one-year one.

“It’s not one winter we have to fight for – we have to think about how we provide and protect next winter as well.

“That should influence the approach we take so that we have reserves, and that’s why unity is important.

“We’ve to stay united for two years to get through, in all likelihood. Please God it will be sooner, please God that war will come to an end sooner, but we can’t be certain of that and, therefore, we have to prepare for a more medium-term approach.”

Mr Ryan said the European Commission’s plan would address some of the excess profits going to the energy industries and bring it back to help people.

“Each country has slightly different circumstances but that broad principle… that the unfair profits caused by a war, not by any action of any companies, do have to be brought back in to help people with bills,” he said.

“I believe the Commission text does that.”

However, the Dublin Bay South TD said the EU “cannot cushion the entire blow” of rising energy prices.

“There will still be a higher cost; even if a large amount of these windfall gains are recycled, that still leaves a pretty high price.

“So we have to be energy-efficient – but we have to help our people too, and businesses.”

Mr Ryan also said Europe would have to co-ordinate more closely with both gas-exporting countries and gas-consuming countries.

“We also have to work internationally,” he said.

“We have to work with some of the supply countries – Norway, UK, America.

“We have to work with other major consuming countries like Japan, Korea, because we are in the LNG market.”

Earlier, Mr Ryan told RTE that an EU windfall tax on energy companies could generate up to two billion euro for Ireland.

He said the measures will be “useful” for Ireland.

Asked how much it would raise for Ireland, the Green Party leader replied: “One to two billion (euro), sort of, is the expectation of what we should expect.

“But that depends on so many different factors – you can’t exactly be clear, but it’s that sort of amount of money.”

On Tuesday, the Government announced 600 euro worth of energy credits for households as part of its 11 billion euro Budget measures.

The 200 euro credits will be paid in three instalments over the coming months.

But the Government stopped short of introducing a cap on energy prices to bring certainty to customers over their bills, despite mounting pressure from the Opposition.

France, Austria, Italy, the Netherlands, Denmark, Poland, Slovakia and the Czech Republic are among a number of EU countries who have introduced an energy price cap.

Mr Ryan said his German counterpart had told him they have not yet made a decision on a price cap.

“They haven’t actually decided on a price cap,” he said. “They may do some mechanism, but they’re working on that and they haven’t concluded.

“Like ourselves, they are also adapting and evolving their position and we will continue to do that.”

Mr Ryan described the scale of the intervention in the Budget earlier this week as “significant”.

But he said they will have to “continue to review the measures”.

“What we’ve agreed and said is we will look and see how they work to get through this winter period.

“Particularly those on very difficult situations within the social welfare system, there is mechanisms where they can go to the Social Welfare Service to look for additional supports.

“We don’t want anyone going cold or through real acute fuel poverty this winter.”