Budget 2027 must permanently cut energy bills and eliminate costly short-term fixes, says Friends of the Earth Ireland

Friends of the Earth calls for investment in warmer homes; a windfall tax on Data Centres, and an acceleration in Ireland’s transition away from fossil fuels

Friends of the Earth Ireland has called on the Government to make Budget 2027 an “energy budget” that permanently lowers household bills, tackles energy poverty, and accelerates Ireland’s move away from imported fossil fuels.

In its Pre-Budget Submission, The Cost of Delay Is Rising, the organisation also calls for a windfall tax on data centres, with the revenue to fund energy upgrades for low-income households. It says there must be a moratorium on large data-centre developments, and for centres with demand above 10MW to pay 100% of their transmission costs upfront.

CEO of Friends of the Earth Ireland, Deirdre Duffy, said: “Universal energy credits and fuel-tax cuts provide only temporary relief, while leaving households exposed to future energy-price shocks. People do not need another sticking plaster solution that helps with one or two bills, while leaving them exposed to the next energy-price shock. They need warmer homes that use less energy and cost less to heat. Budget 2027 cannot simply help people pay their next bill. It must help to permanently reduce the bills they face.”

She said latest figures that show 27% of gas-dependent households and 14% of electricity customers were in arrears in May 2026. Meanwhile, 7.5% of people went without heating at some point during the previous year because they could not afford it.

Research cited in the pre-budget submission estimates that households experiencing energy poverty would need an average of approximately €480 a year to escape it, at an aggregate cost of around €370 million. By comparison, universal electricity credits cost the State between €550 million and €575 million in 2024.

On data centres, Ms Duffy says that rapidly growing electricity demand from data centres must not leave households carrying a disproportionate share of the cost of expanding Ireland’s electricity system.

Recent research commissioned by Friends of the Earth found that rising data-centre demand contributed to a cumulative €715 million loss to the Irish economy over the past decade through its impact on electricity prices. Without limits on demand, that figure could increase by more than €1.4 billion over the coming eight years.

Ms Duffy said: “Households should not be forced to subsidise the extraordinary electricity demand of highly profitable data-centre companies. Those creating additional pressure on the electricity grid must pay the full and fair cost of servicing that demand. A windfall tax on data-centre profits should be used to make the homes of people experiencing energy poverty warmer and cheaper to run.”

It is also urging the Government to reject public funding for a floating LNG terminal or other new gas infrastructure, warning that households must not be left carrying the financial and environmental risks.

Friends of the Earth Ireland also says tenants and those in social housing  should be able to benefit from warmer homes and cheaper renewable energy. An estimated 240,000 to 260,000 rented properties have a Building Energy Rating below B2, including approximately 45,000 homes rated E1 or worse.

The organisation is seeking a dedicated private-rental retrofit programme, phased minimum energy-performance standards and protections to prevent tenants being displaced or subjected to excessive rent increases following upgrades.

Other Budget recommendations are:

• The introduction of a Warm Homes for Winter programme
• A n increase in funding for the Warmer Homes Scheme from €340 million to €400 million
• A doubling of the local-authority social-housing retrofit budget from €140 million to €280 million and
• An increase in the Fuel Allowance by €5 a week, with restrictive qualifying conditions removed and a partial payment introduced for households marginally above the existing thresholds
• A targeted emergency payment for low-income households reliant on home-heating oil or LPG
• A Cost of Disability payment recognising the additional energy needs faced by many disabled people
• Reduced VAT on energy-efficiency upgrades and heat pumps to zero and, 
• Expanding free solar panel supports to financially vulnerable households.

Said Ms Duffy: “Budget 2027 presents a clear choice: continue spending hundreds of millions managing recurring energy crises or invest in lasting solutions. A decisive programme of targeted support, warmer homes and affordable clean energy would cut bills, improve people’s health, strengthen Ireland’s energy security and accelerate climate action. That is what Budget 2027 must deliver.”