Taoiseach Micheál Martin pledges to consider tax on energy company profits in next month’s budget | Barry O'Halloran | The Irish Times | Fri Aug 5 2022 | www.irishtimes.com
Revenue from big power companies’ wind farms are multiplying as electricity prices soar, official estimates show.
Leading Irish energy players including ESB, Energia and SSE Airtricity all own wind farms that supply electricity to the wholesale market.
The State’s Commission for the Regulation of Utilities (CRU) forecasts that wind farms could earn an average of €330.23 a mega watt hour (MW/h) for electricity they sell to the wholesale market over the 12 months from next October.
This is six times the €53.66 MW/h that the regulator predicted the industry would earn over the same period two years ago, before energy prices began rising rapidly in 2021.
News of the surge in wind power earnings comes as families and businesses struggle with high bills that are running at up to €2,600 a year for electricity and €2,200 for natural gas.
The average Irish family uses about 4 MW/h of electricity in a year. As wind farms only operate about a third of the time, their wholesale revenues from each household in the Republic would approach €440 over a year, or €36.67 a month.
Taoiseach Micheál Martin pledged that the Government would consider a windfall tax on energy company profits in next month’s budget. He told reporters yesterday that these businesses were making “significant profits” all around.
Up to last year, most wind farms in the Republic earned either €72.69 MW/h or €75.24 MW/h, the minimum prices they are guaranteed under the State’s the Renewable Energy Feed-in Tariff support scheme.
Asked on Thursday if it could use the boost in wind farm earnings to offset price increases, the ESB said the law obliges it to separate its generating and supply businesses, which includes Electric Ireland.
The State company added that Electric Ireland “continues to offer the best value it can for customers by providing one of the lowest standard electricity rates in the market”.
Energia, which owns about 300MW of wind power, said volatility made price predictions impossible. It added that renewable and gas generators last year “offset significant financial losses” in its retail business.
SSE Airtricity, whose 700MW of wind power make it Ireland’s biggest renewable electricity business, said it did not speculate about prices.
“We’re actively managing current market volatility and seeking to minimise the impact on our customers insofar as possible,” the company said.
The group pointed out that it recently pledged to protect financially vulnerable customers for the rest of the year.
The CRU announced last week that households would get an €89.10 refund from some renewable generators receiving wholesale electricity prices higher than those for which they contracted under a new scheme meant to support their industry.
However, most Irish wind farms benefit from the older REFIT scheme, which does not oblige them to refund cash if the wholesale price tops the amount they are guaranteed under this system.
Wind farms with the capacity to supply 4,000MW of electricity benefit from REFIT, while those that operate under the new Renewable Energy Support Scheme, which includes the refund requirement, only amount to 156MW.
When prices fell short of the sums guaranteed under these schemes, customers make up the difference through a public service obligation charge.
Generators sell electricity at wholesale charges to companies that supply power to homes and businesses. The system is meant to favour power plants that offer the lowest prices.
However, as wind farms get a guaranteed minimum price for their electricity, they simply sell it at whatever the market is paying.
URL to article: https://www.wind-watch.org/news/2022/08/05/revenue-from-big-power-companies-wind-farms-is-multiplying-as-electricity-prices-soar/