Levy on electricity bills to subsidise wind farms set to fall
Energy regulator, the Commission for the Regulation of Utilities, has decided to set the levy at €1.94 a month from October.
This works out at €23 a year, and is half of what the Public Services Obligation (PSO) levy is at the moment.
Electricity prices in this country are already among the highest in Europe
However, it comes after a warning this week that household electricity bills are to be hit with an increase by at least €83 a year to pay for a major upgrade of the country's power system.
Households currently pay on average €254 per year as part of their bill to help fund annual upgrades but that would increase to €337 next year under the current proposal.
ESB Networks has asked the energy regulator to approve a price increase that would enable it to fund investment of between €10.1bn and €13.4bn over the next five years.
At the lower estimate, the average residential bill-holder would be charged €1.60 extra per week, totalling €83 per year or €415 over the investment period.
This is on top of the standing charge imposed on electricity bills.
The CRU is tasked with working out how much money wind farms and solar panel operators will need each year to enable them to supply electricity. This is charged to households and companies in the form of the PSO levy.
The regulator has now issued a decision paper which indicates that the PSO levy for 2025/26 has been calculated that €156.22m.
This is the amount the CRU says will be required to support these renewable energy projects. 'This will result in a monthly charge of €1.94 and €7.59 for domestic and small commercial customers, respectively,' the CRU said.
Last year it was revealed that the average household electricity bills was to rise by €100 over a year from last October after the energy regulator approved an increase in the funding needed to operate and develop the electricity grid.
Daragh Cassidy of price comparison site Bonkers.ie said the proposed reduction in the PSO levy is obviously welcome.
But wholesale electricity prices remain so high.
This is why less money is needed to support renewable projects as they are already receiving enough money for the electricity they generate on the open market.
'But given how high prices remain, many households will probably be wondering why the levy is still needed at all,' he said.
Mr Cassidy said the move towards net zero is going to be difficult and billions of euro is needed by EirGrid and the ESB over the coming years to help reinforce our grid in order to meet our climate targets.
'And while renewable energy should help electricity prices ease from their near-record highs over the coming years, some of the savings will be cancelled out by the money that's needed to invest in infrastructure like battery storage, interconnectors, and the grid itself to better manage all the renewable energy.'
The Bonkers.ie executive said electricity prices in Ireland are still around 70pc to 80pc above where they were before the war in Ukraine broke out.
It means the average household is still paying over €500 a year more for their electricity than they were only a few years ago.
It is similar for gas. But it is highly unlikely prices will revert anywhere near to pre-war levels in the medium term unfortunately.
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Irish Independent
a day ago
- Irish Independent
Levy on electricity bills to subsidise wind farms set to fall
Energy regulator, the Commission for the Regulation of Utilities, has decided to set the levy at €1.94 a month from October. This works out at €23 a year, and is half of what the Public Services Obligation (PSO) levy is at the moment. Electricity prices in this country are already among the highest in Europe However, it comes after a warning this week that household electricity bills are to be hit with an increase by at least €83 a year to pay for a major upgrade of the country's power system. Households currently pay on average €254 per year as part of their bill to help fund annual upgrades but that would increase to €337 next year under the current proposal. ESB Networks has asked the energy regulator to approve a price increase that would enable it to fund investment of between €10.1bn and €13.4bn over the next five years. At the lower estimate, the average residential bill-holder would be charged €1.60 extra per week, totalling €83 per year or €415 over the investment period. This is on top of the standing charge imposed on electricity bills. The CRU is tasked with working out how much money wind farms and solar panel operators will need each year to enable them to supply electricity. This is charged to households and companies in the form of the PSO levy. The regulator has now issued a decision paper which indicates that the PSO levy for 2025/26 has been calculated that €156.22m. This is the amount the CRU says will be required to support these renewable energy projects. 'This will result in a monthly charge of €1.94 and €7.59 for domestic and small commercial customers, respectively,' the CRU said. Last year it was revealed that the average household electricity bills was to rise by €100 over a year from last October after the energy regulator approved an increase in the funding needed to operate and develop the electricity grid. Daragh Cassidy of price comparison site said the proposed reduction in the PSO levy is obviously welcome. But wholesale electricity prices remain so high. This is why less money is needed to support renewable projects as they are already receiving enough money for the electricity they generate on the open market. 'But given how high prices remain, many households will probably be wondering why the levy is still needed at all,' he said. Mr Cassidy said the move towards net zero is going to be difficult and billions of euro is needed by EirGrid and the ESB over the coming years to help reinforce our grid in order to meet our climate targets. 'And while renewable energy should help electricity prices ease from their near-record highs over the coming years, some of the savings will be cancelled out by the money that's needed to invest in infrastructure like battery storage, interconnectors, and the grid itself to better manage all the renewable energy.' The executive said electricity prices in Ireland are still around 70pc to 80pc above where they were before the war in Ukraine broke out. It means the average household is still paying over €500 a year more for their electricity than they were only a few years ago. It is similar for gas. But it is highly unlikely prices will revert anywhere near to pre-war levels in the medium term unfortunately.
Irish Times
a day ago
- Irish Times
Upgrade of power system could spark €83 yearly increase in household electricity bills
Household electricity bills could increase by €83 per year to pay for an 'essential' upgrade of the country's power system, the chief executive of the Electricity Association of Ireland (EAI) has said. Dara Lynott said ESB Networks estimates it will need between €10 billion and €13.4 billion to upgrade the system over the next five years. ESB Networks has asked the Commission for Regulation of Utilities (CRU) to approve a price increase in order to facilitate this. It is estimated that such a price increase would result in household electricity bills increasing by at least €1.60 per week or about €83 per year. Mr Lynott said the investment is 'absolutely needed' and should be treated the same way as investing in any other 'essential' service, such as roads or water. READ MORE Mr Lynott said renewables such as wind, solar and hydropower currently provide about 40 per cent of electricity in Ireland. He said this figure needs to increase to 'reduce emissions' and improve the efficiency of the grid. He said a price increase of around €1.60 per week for electricity should be viewed 'in context', noting that people in Dublin regularly pay €3.75 for a cup of coffee 'if they're lucky'. 'That's not to say that the price increase won't be difficult for some people but there are measures that can be done by the Government to negate this, such as energy credits.' Mr Lynott said people over the age of 65 and single mothers with children under 18 are two cohorts most likely to feel the impact of a bill increase. He said the Government should consider giving these groups a free allotment of electricity units. He said universal credits are 'regressive' and the only way to tackle 'energy poverty' is with targeted measures such as electricity credits. [ Irish electricity prices, already Europe's highest, may rise further due to 'required investment' Opens in new window ] The Department of Social Protection provides a €35 monthly electricity allowance through the Household Benefits Package to help individuals with their energy bills. This allowance is paid directly into a person's bank account, so is not necessarily spent on energy bills, My Lynott noted. It was announced in Budget 2025 that all domestic electricity customers would get €250 off their electricity bills via two instalments of €125, as part of the Government's cost-of-living package. Similar measures had been announced in previous budgets. However, the Government has indicated that universal credits may not feature in the upcoming budget, potentially being replaced with more targeted measures. 'We're not going to have a cost-of-living package this year,' Taoiseach Micheál Martin said in February. The Irish Times has contacted ESB Networks, the Department of Social Protection and the Department of Climate, Energy and the Environment for comment.
The Journal
a day ago
- The Journal
PSO levy reduction expected but it won't make much of a dent in energy bills for households
A REDUCTION IN the Public Service Obligation (PSO) levy that appears on electricity bills of households and small businesses is to be announced this week. The PSO levy is charged to all electricity customers in Ireland in a bid to support the generation of electricity from sustainable, renewable and indigenous sources. The annual charge is currently €42.25. It is expected that the a reduction in the PSO levy for both households and small commercial businesses will result in savings of around €23 per year for households and €90 per year for small businesses. Government sources state that this is just one small item in a suite of measures being examined to bring the the cost of bills down for consumers. 'This Government is committed to tackling high energy costs through a wide range of measures while continuing to accelerate the decarbonisation of Ireland's energy system,' they said. The measure comes as it emerged yesterday that electricity bills will actually increase by at least €83 a year to pay for a major upgrade of the country's power system. ESB Networks has asked the energy regulator to approve a price increase that would enable it to fund investment of over €10 billion in next five years, investment that a conference heard yesterday is badly needed in order to meet the growing demands on the power grid. The government has come under increasing pressure to assist homes and businesses with electricity and gas costs, with Irish people paying some of the most expensive bills in Europe. A new group, tasked with driving down the cost for businesses, met yesterday for the first time. The Minister for Enterprise, Tourism and Employment Peter Burke established the new group with the aim of reducing the cost of running a business. Advertisement The forum brings together business owners, retailers, tourism operators, accounting professionals and representative groups—alongside regulators and state agencies—to look at the structural issues that are driving up costs and the steps that could be taken to mitigate them. However, for every day households, little assistance is on the horizon this year, with government stating that there will be no across-the-board energy credits this year. Irish customers do pay more, says minister Energy Minister Darragh O'Brien told The Journal this week that Irish customers, in comparison to our EU colleagues, do pay more when it comes to energy. 'We're probably the third most expensive when you average it out,' he said. The minister said he had set up an affordability task force within his department that he will be chair next week. The group is looking at options on how to drive affordability, said O'Brien, but added that how electricity prices are struck is the main issue impacting Irish householders. The cost of electricity for Irish customers is still linked at European level to the wholesale gas price, said the minister. O'Brien said he has raised the matter with the European Commission on how to break that link, but said it is a 'medium term' body of work that is needed before any changes will be seen. 'More EU states like Ireland are now producing more renewable energy, yet the energy cost itself is still linked to the wholesale gas prices. So that's something that at an EU level, I can't change that independently for Ireland, that's something that we will be having discussions on at an EU level,' said the minister. The minister said the matter will be raised again at the Energy Council in Luxembourg next week. 'There are other EU partners who would be in agreement with us that we need to reflect in our pricing the fact that we've more renewables year-on-year coming on stream, that we're becoming less dependent on gas and on fossils. So why should the base price be stuck on the basis of the wholesale gas price. I think that's a bigger discussion that we need to have,' the minister said. Readers like you are keeping these stories free for everyone... A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article. Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation. Learn More Support The Journal
