Wind power generators have defended a decision by the energy regulator to add €270 million to consumers’ and businesses’ electricity bills to cover the cost of supports given to the industry.
Households and business electricity bills will rise from October when the Commission for Energy Regulation (CER) increases the public service obligation (PSO) charge by €76 million to €400 million to cover the cost of supporting green energy and peat-burning power plants.
Wind generators, including State-owned ESB, SSE Airtricity and Viridian, will be the biggest beneficiaries, sharing €269.7 million of the total that the CER will collect from electricity users.
Industry lobby group, the Irish Wind Energy Association (IWEA), has hit back at criticisms of the move by arguing that wind power cuts the overall wholesale price of electricity because its cost is close to zero.
“Renewable generation therefore displaces more expensive fossil fuel generation, and so for the consumer the cost of wind energy within the PSO is offset by delivering lower electricity prices than if we depended solely on other electricity sources,” the association argued.
It added that a recent report based on statistics produced by the national electricity grid operator, Eirgrid, showed that during the first half of this year wind energy delivered a fifth of the Republic’s electricity demand. This cut wholesale prices by 29 per cent on the same period in 2015, it said.
The PSO is levied on every electricity user in the Republic and is revised every October. The cash collected from consumers and businesses bridges the gap between the wholesale cost of electricity and prices guaranteed to a number of generators, to which it is distributed.
A number of Government schemes underwrite prices paid to companies generating electricity from “green” sources. The CER said that a 33 per cent increase in the amount of wind power that the PSO is supporting is driving up the levy.
The increase in the current levy has already drawn fire from a number of sources, including employers’ group Ibec, which pointed out that business carries a disproportionate share of the cost.
Critics say that the wind energy industry has matured and no longer needs an extra charge to be imposed on consumers and businesses to support it. They also say that the measure is a regressive tax, as it is a flat rate and hits poorer households harder.
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