Consumer Rip-Off: Carbon Windfall Tax on Power Generators Needed.

Thursday, 30 July 2009

Cash raised should be ploughed back into green energy projects

Today (Thursday) I repeated my call to introduce a new carbon windfall tax on electricity generators.

A scandalous situation continues where electricity generators, like the ESB, are required to charge energy users for carbon emitted during generation, even though the Government is giving ‘carbon allowance credits’ for free to all generators as we prepare for full carbon trading post 2012.

In effect, generators get the credits for free, but they charge full price for those credits when billing consumers. After 2012 all electricity generators will have to purchase carbon credits.

It is now 14 months since Fine Gael first proposed that Government should introduce a carbon windfall tax, to take back unearned profits of up to €1.6 billion reaped by power generators in the period 2008-2012 as they receive carbon credits for free but continue to charge end consumers to reflect the cost of carbon. The average electricity bill for families and businesses in 2008 had a 10% increase directly attributable to carbon charges, a figure of €220 million.

Since then, the Irish economy has utterly changed and its lack of competitiveness is clear for all to see. New green energy businesses will be part of Ireland's economic recovery. If Eamon Ryan is serious about the ‘green agenda’ then he should immediately move to take back this unearned money from power generators and use it to promote energy conservation projects or to reduce the cost of electricity.

This is not unprecedented as the UK Government was also faced with a similar situation but signed a deal with the large British energy companies for them to provide free cavity wall and loft insulation for pensioners and poor households, 50% off cost of insulation for all households, a freeze on last year's bills for half a million poor consumers, increase cold weather payments to go up from £8.50 a week to £25 a week for pensioners, disabled people and unemployed families with children under five.

It is clear that Eamon Ryan has been at sea on this issue, and consumers have paid the price.

I am repeating my call once again to use this as an opportunity to create a good news story in the Energy area.