Ministers set to agree windfall plan for energy sector profits

The Cabinet is set to agree a cap on all market revenues of non-gas electricity generators alongside a temporary solidarity contribution for companies active in fossil fuel production.

Minister for Environment Eamon Ryan is expected to bring a memo to Tuesday’s Cabinet meeting including fresh measures to address windfall gains in the energy sector. EU energy ministers recently agreed that a cap should apply on operators that have made unexpectedly large financial gains over the past months without their operating costs increasing.

One Coalition source estimated the windfall cap could raise anything from €400 million to €1 billion. The solidarity contribution from fossil fuel companies could also provide financial support to struggling households and companies over the coming winter months.

The European Union first unveiled the proposals for a sweeping energy cap in September, in an attempt to stop member states imposing divergent national measures as they scrambled to quell public outrage over high electricity bills.

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European Commission president Ursula von der Leyen announced the plans to allow member state governments to cap and redistribute all money paid for renewable and nuclear energy above a rate of €180 per megawatt hour, saying that companies were earning “revenues they never accounted for, they never even dreamt of”.

“In our social market economy, profits are good. But in these times, it is wrong to receive extraordinary record profits benefiting from war and on the back of consumers,” she said at the time.

The full details of the cap are due to be announced at a press conference on Tuesday.