The PSO Levy is paid to Renewables and Peat generation every year to make up the shortfall between the market price and fixed price set for certain indigenous sources. The Energy Regulator has announced a 20% increase in the PSO Levy for the 2017/18 year. Renewables now makes up 80% of the levy and wind energy makes up 94% of renewables. So 75% of the PSO Levy now goes to wind generation.
The amount of PSO Levy paid to renewables has doubled in two years from €181 million to € 376 million as renewable generation capacity increased by over 50% from 2,000 MW in 2015 to nearly 3,300 MW in 2017 .
|Renewables generation capacity in blue and PSO Levy in millions in red|
Back in 2013, energy costs were a big issue for multinationals in Ireland. Following this recent announcement on the PSO Levy by the energy regulator, it will surely be an even bigger issue.
For domestic / household consumers, they will see a massive 30% increase in the levy. How long can this go on until there is a backlash ? The Regulator tries to reassure consumers :
Increasing levels of wind generation on the system decrease the wholesale price of electricity, which feeds through to retail prices.
This claim was debunked on my blog a few years ago :
The reason for recent falls in wholesale prices was because of the fall in the price of gas. Which was more than offset by the PSO Levy and increases in network and other system costs to pay for all this new renewable infrastructure.