Irish consumers paying more for renewable electricity than necessary, lobby group claims

Consumers here are paying over the odds for renewable electricity, the Irish Solar Energy Association (ISEA) has claimed.

In a report, the group highlights that while the Government’s Renewable Electricity Support Scheme (RESS) auctions are saving money, consumers are still paying more than they need to be.

Under the RESS, energy providers compete via auctions for contracts to supply renewable electricity to the national grid at a guaranteed price. If the wholesale market rate exceeds that price then the provider must repay the difference into the PSO (Public Service Obligation) levy.

The ISEA forecasts that over the next year a total of €313 million will be repaid by renewable energy providers.

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“This means that RESS is saving each Irish household €89 as well as saving businesses money on the PSO element of their bill,” it said.

Bid price factors

But the ISEA’s report, compiled by consultancy KPMG, indicates the average auction price has risen 32 per cent since 2020.

The umbrella group is calling for action to tackle what it describes as manageable factors that impact that price in advance of next year’s RESS 3 auction.

Chief executive Conall Bolger said: “There are many factors that determine the bid price for solar or other renewable providers in the RESS auctions. Global inflation has played its part by increasing the cost of supplies and labour. But there are still many more factors that are within our domestic control and these should be addressed.

“66 Solar projects were successful in RESS 2 which will deliver enough energy to power over 350,000 Irish homes. While this is a hugely positive development and the figures from this year show that it saves Irish consumers money, it is equally clear that the savings could be higher,” he said, noting uncertainty regarding grid costs is one factor that drives up prices.

“Energy companies are forced to prepare with uncertain information about how much it will cost to connect their renewable project to the national grid,” he said.

“It is a source of huge frustration that one arm of the State is running a scheme centred around projects connecting to the national grid, while another will not confirm how much this connection will cost.”

The cost of using the network was also subject to uncertainty while business rates varied across different local authorities, Mr Bolger said.