By some calculations the State could reap almost €1 billion from the energy crisis before we factor in charges like VAT and excise. On Wednesday State-owned ESB announced that it would pay a €327 million dividend to the Exchequer this year, more than twice the €126 million handed over in 2022.
This follows a doubling of pretax profits at the energy supplier to €700 million last year from €288 million in 2021. A €590 million surge in operating earnings from electricity generation to €774 million helped drive this. That was down to high wholesale charges, the result of soaring natural gas prices on world markets.
While the State is pocketing €327 million from the ESB it will press on with proposals to cap electricity generation revenues from wind, solar, coal and other “non-gas” sources, and impose a “temporary solidarity payment” on fossil fuel production and refining profits.
Call them what you want – they are taxes. Government takes a share of money earned by private organisations for its own use. In the revenue cap’s case it will collect the surplus and distribute it to electricity customers to ease the impact of high prices. You will continue to pay high prices for energy; Government will take some of that cash from them to give back to you.
Its plans for the solidarity payment proceeds are vague. It will collect them this year and next. EU law allows them to be used in a “wider range of areas”, including aiding energy customers, cutting consumption and promoting investment in renewables.
None of this will cut the high energy prices that are to blame for the cost-of-living crisis. The measures simply involve politicians moving cash around while pretending to support hard-pressed workers and their families.
According to its own statement the Government could collect between €280 million and €600 million from the revenue cap and solidarity tax. Added to the ESB dividend that amounts to a potential €927 million in total. Thanks to the energy crisis the State will be laughing all the way to the banks (which it also partially owns).