Airtricity, the renewable energy group, is planning to raise prices by 6-8 per cent for its 45,000 customers. Its importation of energy from Scottish Hydro is one of the reasons for the decision.
The company at present does not have the capacity to serve all its Irish customers, so it is forced to import over 45 per cent of its needs from Scotland.
It has a contract with Scottish Hydro, which has also been increasing its prices over recent months.
The vast majority of its customer base is small and medium enterprises. Dermot O'Kane, chief operations officer, Airtricity, said despite the increases, its rates were on average 5 per cent below ESB tariffs.
Airtricity blamed the national grid for not connecting enough wind farms to the system. Mr O'Kane said that there were 2,200 megawatts of power waiting for a grid connection. He said that while delays like this were taking place, the importation of power would continue.
He said the company would like to eliminate importation, but under the current regulatory regime this was impossible. A letter sent in recent days to Airtricity customers states: "The cost of imported renewable power is set by wholesale prices which are heavily influenced by changes in traditional fuel prices.
"As a result, UK power prices are currently some 50 per cent higher than during the same period last year. Against this background Airtricity has been forced to review its current pricing structure."
Airtricity has a small number of domestic customers, but it does not actively seek such customers. The past few weeks have been tough for the wind energy industry in Ireland, with the cold weather militating against high output from wind farms. Last week, the sector was only contributing 75 megawatts to the National Grid, according to a "snapshot" done by the Commission for Energy Regulation. However, at other times the sector has plugged gaps when conventional plants have been out of action.
Traditionally, conventional energy has produced 3- 5 cent per kilowatt hour, with wind at about 6-7 cent a kilowatt hour. However, this gap has been closing in recent years.
