Homeowners will not be charged a levy on their electricity bills next year to help fund the development of renewable energy sources. But they will not benefit from the €89.10 refund they got this year at a time of sharply rising energy prices.
The Commission for the Regulation of Utilities (CRU) on Tuesday confirmed the public service obligation (PSO) levy will be set at zero for the 12 months from October 1st this year to the end of September next year. The levy is a subsidy all electricity consumers are charged to fund wind and solar projects, reducing the State’s reliance on fossil fuels for power generation. It is designed to bridge the gap between the wholesale cost of electricity and prices guaranteed to a number of generators of renewable power.
Surging wholesale energy prices last year meant renewable power generators actually secured more than their guaranteed price. That led to a negative PSO funding requirement of €491.25 million, which translated into a €89.10 refund per paying consumer.
The CRU says the funding requirement for the 12 months from October will still be negative but at a much lower level – at €67.47 million. However, it expects a need to levy a charge on consumers in the following 12 months, from October 2024. This is partly because the price renewable generators were securing in the market this year has been lower than had been predicted and also because wholesale energy prices are expected to continue to fall.
The CRU said that, given the payment to consumers this year would be much lower anyway – closer to €10 – it would set the levy at zero to mitigate some of the expected future price volatility.
“Given the comparatively smaller payment this year, the CRU has decided to set the PSO levy to zero this year to offset the expected increase in the PSO levy for 2024/25 and help reduce the impact of these higher charges on customer’s bills,” John Melvin, CRU’s director of wholesale markets said.
