Measures needed to support energy security and affordability
The Russian invasion of Ukraine has put pressure on Europe’s energy system, its over dependence on fossil gas from Russia, and diversify its energy mix since the energy crisis of 2008. The invasion has also accelerated energy price inflation, with natural gas and oil prices rising to record levels, increasing the already high cost of doing business for small firms.
Ireland is acutely exposed to these cost increases and energy supply challenges because of our increasing dependence on imported gas, our low levels of electricity interconnection, and a surge in electricity demand projected for this decade. Like households, Irish businesses are struggling to adjust to these exceptional price increases, with energy intensive sectors at particular risk.
Small Firms and the jobs they create will be lost if Government doesn’t do more to address this energy crisis Irish businesses spend (excluding energy suppliers) over €3 billion annually on natural gas and electricity and a further €1 billion on road transport fuels. Many SFA Members are reporting increases in some costs which are multiples of the same time in 2021. This will put major pressure on small business’ ability to maintain profitability with knock on implications for investment and jobs.
The SFA and Ibec has called on the Government to implement the following:
Work with business to provide immediate direct fiscal interventions to help ease the burden of increasing energy costs
- Develop, with EU partners, a common Emergency Aid Framework to support business across the continent through this period of volatility and exceptional costs
- Advance plans to undertake a comprehensive national energy security review to identify risks and opportunities in our energy system as we transition to net zero
- Bring forward by one year the development of an integrated hydrogen strategy for Ireland and set clear national targets for hydrogen and renewable gas
- Begin work on a new framework to permit the development of new emergency energy storage in Ireland, including back up LNG options
- Revise the Diesel Rebate Scheme for Irish hauliers to keep the sector viable and Irish business competitive during this period.
- Accelerate decarbonisation and energy efficiency gains by a scaling-up of business supports and advancing the timeline for the national retrofit programme.