The amount of money paid to the ESB for operating peat-fired stations and buying renewable energy is set to rise by more than 60 per cent to almost €75 million next year, it has emerged.
The money will be recouped from domestic and commercial customers in 2004 via a public service obligation levy, the Commission for Energy Regulation (CER) said yesterday.
Of the €75 million to be paid in 2004, €58.4 million will be accounted for by peat, with the rest linked to renewable or alternative energy sources.
Most industry experts agree that the peat stations would not be sustainable without some kind of financial assistance to the ESB. Another State company, Bord na Móna, supplies the majority of the peat used in the stations.
While the peat stations contribute only a small portion of the 4,440 megawatts produced each year by ESB, their contribution will be needed for the remainder of this year and into 2004 due to supply constraints in the State.
The CER is running a competition for a new power station, with seven parties already expressing an interest. The contract is potentially worth €1.4 billion.
For the year 2003, the CER allowed the ESB to recover €46.5 million via a public service obligation levy.
The increase for 2004 is mainly due to the rise in the number of green energy projects and the construction of a new peat-fired plant at Lanesboro, Co Longford. An existing station in the same location is due to close early in 2004.
Based on CER's proposals for 2004, domestic customers will have to pay €18.16 during the year, while small commercial customers will pay €54.98. Medium and large users will pay €9.99 per kilovolt used. In terms of the average household bill, the levy will add €1.51 per month.
The CER will accept representations on the issue before making a final determination next month.
In April, the ESB submitted its estimated costs for generating electricity from various peat-fired stations. It also gets compensated for buying electricity from certain renewable suppliers and the privately owned peat station at Edenderry.
All suppliers, including Viridian, must collect the levy from all customers. The levy is based on the customer's installed capacity. It is included on bills as a separate item.
The ESB operates four peat stations: Shannonbridge, Lanesboro, Cahirciveen and Bellacorrick. Cahirciveen is due to close shortly following a vote by workers in favour of a closure package.
