Budget 2023 gives ‘highest funding ever’ to energy efficiency grants

27 Sep 2022

Minister for the Environment, Climate and Communications and Minister for Transport Eamon Ryan. Image: Julien Behal Photography

Budget 2023 has given more funding for climate crisis projects, sustainable transport and EV grants, but the ISEA said the root causes of high energy costs were not addressed.

While Budget 2023 is focused heavily on “cost of living” measures for the public, funding has still been allocated towards achieving Ireland’s climate goals.

In his Budget speech this afternoon (27 September), Minister for Finance Paschal Donohoe, TD, said the climate emergency is one of the “key challenges of our times”, with its impacts becoming “more frequent and more destructive”.

“Protecting our environment is the responsibility of us all and Government is acting to reduce emissions and support newer cleaner technologies, particularly in energy and transport,” Donohoe said.

Energy and climate

Budget 2023 has allocated more than €1bn to the Department of the Environment, Climate and Communications.

Minister for Public Expenditure and Reform Michael McGrath, TD, said €337m of this will go toward grants for energy efficiency. He told the Dáil that this is the “highest funding ever” committed to energy efficiency.

“This will fund over 37,000 home energy upgrades including households in, or at risk of, energy poverty through the Warmer Homes Scheme,” McGrath said.

The Budget also includes electricity credits for all households worth €600, which will be paid in three instalments of €200.

Minister for the Environment, Climate and Communications and Minister for Transport Eamon Ryan, TD, noted that this Budget is about “helping people right now”. He also said it provides the funding to progress the “long-term goal of a climate-neutral, sustainable and digitally-connected Ireland”.

“The real lasting solution to this fossil fuel crisis, which is causing so much hardship for people, is to scale up and speed up our transition to renewable energy systems,” Ryan said.

€143m has been provided to support initiatives to lead Ireland’s climate crisis response, such as funding for vital research.

€110m, meanwhile, will support the transition to a circular economy and will protect Ireland’s environment and biodiversity. This includes the introduction of a new Deposit Return Scheme for aluminium cans and plastic bottles.

An additional €4m in funding to the Local Enterprise Office network includes a new grant for microenterprises for energy efficiency.

This Small Firms Investment in Energy Efficiency Scheme will provide a grant to companies to encourage capital investment in projects to reduce carbon emissions.

Green transport

Transport developments are set to continue at pace in the latest Budget, with €2.6bn of capital funding going to transport. McGrath said this is the highest level of capital investment since 2008.

“This will help us to progress key transport infrastructural projects including BusConnects, MetroLink and the DART+ Programme,” McGrath said.

A total of €1.9bn is being allocated to sustainable mobility. This includes active travel and greenways, public transport and carbon reduction programmes.

Funding has also being pushed toward electric vehicles, with €110m allocated for EV grants and charging infrastructure, which includes €8m in the Shared Island Fund.

Ryan said a focus will be on improving the coverage and frequency of Ireland’s public transport network, while “greatly improving our rural transport connectivity”.

“Transport is key to Ireland’s future development and sustainability, both to ensure that we can get around easily, cost effectively and safely, but also to ensure that we meet our emissions targets by 2030 and beyond,” he said.

‘A missed opportunity

Despite the increased funding for energy efficiency and transport, some experts have spoken out against parts of the Budget.

The Irish Solar Energy Association (ISEA) said that Budget 2023 is a missed opportunity, which fails to address the root causes of high energy costs.

ISEA CEO Conall Bolger said Ireland’s target of delivering 5.5 GW of solar energy by 2030 is “ambitious but possible”, provided the right policy framework is in place.

“Budget 2023 failed to make progress on creating that framework and will make reaching that target more challenging,” Bolger said.

Bolger also criticised the €600 in electricity credits as a short-sighted provision, which should have come with “measures that reduce our dependence on fossil fuels”.

“People clearly need help with their electricity bills this winter and this credit will provide that help,” Bolger said. “However, it does nothing to address the cause of the soaring costs.

“We cannot continue to invest heavily in treating the problem while consistently ignoring its causes.”

Joining an EU-wide response

Professional services firm Deloitte said long-term strategic planning is needed to avoid an energy crises in future years. Deloitte tax partner Karen Frawley spoke about the proposed EU regulation that was mentioned in Minister Donohoe’s speech.

These measures include a cap of €180 per MWh on low-cost electricity generating companies whose costs are unrelated to high gas prices

“The proposal would introduce an EU-wide temporary windfall tax at a rate of 33pc over the surplus taxable profits of companies in the oil, gas and refinery sectors,” Frawley said.

Speaking on this windfall tax, Donohoe said it is not fair for companies to earn excess profits “from the current volatility in the market”.

“Ireland aims to be part of this EU-wide response to high energy prices.” Donohoe said. “If this is not possible, this Government will bring forward our own measures.”

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Leigh Mc Gowran is a journalist with Silicon Republic