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The Government of Ireland announced a package with measures to mitigate the hike in electricity bills while ensuring a secure power supply to households and businesses across the country.
Under the package, the government would ready the backup power generation capacity for secure electricity supply, with the provision of funds to address the risks in supply during winters.
The Public Service Obligation (PSO) levy (beyond those announced earlier in the year) would be altered, resulting in savings for domestic power bills for the PSO year starting October 2022.
A dip in the relative cost of renewable energy compared to fossil fuel generation also reflects the reduction in the PSO levy.
Levy payments are calculated based on estimated generation and wholesale electricity market prices for the year ahead. The regulatory body responsible for uninterrupted power supply, the Commission for the Regulation of Utilities (CRU), estimates and certifies the levy annually, aligning with relevant legislation.
Earlier, the government announced that the levy would go to zero from October 1, 2022, leading to an annual saving of €52 (~$54.61), excluding the value-added tax (VAT).
In another announcement, the government said the proposed PSO levy would decrease from €263 million (~$276.42 million) for 2021-2022 to an estimated figure of minus €408 million (~$428.37 million) for the forthcoming year. The reduction would lead to a rebate for domestic household bills, equating to an indicative annual saving of €75 (~$78.80) on a typical home’s power bill from next winter.
The Commission has already arranged procurement of additional temporary emergency generation capacity for the winters of 2023 to 2024 and 2025 to 2026 and has directed the country’s state-owned power grid EirGrid to undertake measures to procure the backup capacity. By July end, the CRU will issue a final decision on the exact PSO levy applicable from October 2022 to September 2023.
The government said that the package would provide EirGrid with an increased borrowing limit of €3 billion (~$3.31 million) to strengthen Ireland’s national grid as part of ‘Shaping Our Electricity Future’ strategy and deliver power to the Celtic (Ireland-France) Interconnector.
Bord na Móna, a semi-state company, will be provided with an increased borrowing limit of €650 million (~$683.43 million) to drive a higher deployment of indigenous renewable energy across the Midlands and beyond as part of its Brown to Green strategy.
Recently, EirGrid announced the final auction results to deploy 1.9 GW of clean energy capacity under the second phase of its Renewable Electricity Support Scheme. The capacity awarded in the auction includes 414 MW of onshore wind and 1,534 MW of solar, with an annual output capacity estimated for these projects at 2,748 GWh.
A Global Wind Energy Council report recently highlighted Ireland’s attractive floating offshore wind market if the transmission grid and the country’s port infrastructure are upgraded. The report highlighted that the country has the potential to produce 5 GW of power generation capacity by 2030 from offshore wind energy alone.