Electricity Bills Set to Rise (Once Again)
There is more headache on the way for Irish billpayers as the PSO Levy is set to reach it's highest ever amount at € 480 million, with the vast majority of it going to wind energy. This hike to electricity bills comes at a time when wholesale prices for electricity will be at their lowest since 2017 - when it was also €46 per MWh. So these savings will not be passed on to the consumer.
In fact, Irish consumers are locked into high energy costs for a long time. You may have voted for the Lisbon Treaty, which guaranteed an internal market with a highly competitive social market economy but you won't be getting that.
The graph below shows how much electricity generating capacity has grown since 2006, at the height of the building boom. We had sufficient capacity then, but now we have twice as much as we need, with demand on or about the same. As wind farms cannot replace a conventional power station, it means that each new wind farm built is additional to our capacity requirements, and all of this excess capacity must be funded by consumers through taxes and levies and hidden costs.
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| Electricity Generating Capacity for the Rep of Ireland
Dispatchable Plant is plant that can be switched on when required, e.g. gas, coal as opposed to
wind energy which is intermittent and dependent on weather conditions
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Right now after the 1st of so-called return to normality from the impact of the hoax COVID_19 virus Demand is down 30% since Christmas time. But they are still adding capacity if demand returns to what it was before the hoax we will see further increases in The PSO. But it is unlikely that Demand will rebound. With global energy prices likely to remain subdued and demand less than projected all this capital will have to be funded by largely static demand. As wind farms in the best of times loose money these losses are likely to increase. So even without adding capacity the PSO was to increase significantly. But adding capacity in such conditions wind farm losses are likely to increase dramatically. In the commercial world where the capital cost is paid back out of profits adding capacity capacity in a static or a contracting market would be viewed as insanity.But given the policy of producing 70% of demand from renewables , mainly wind, this investment will have? to be recovered and losses at wind farms should increase significantly. The only way these investments?/capital costs can be recovered is through The PSO. The alternative is to allow the wind energy sector financially implode and let 70% renewable policy fail .However it is highly unlikely that it ,the 70% target, could be achieved any way.As the price of a product increases demand for that product should decrease further increasing wind farm losses.So we are in a vicious circle. increasing wind energy subsides to prevent wind farms from financial bankruptcy but drops in demand maintaining or increasing their level of losses. Eventually a decision has to be made either wreck the economy or allow the wind energy business financially implode.I know which decision I would make. Either way the wind energy business will financially implode.The question that has to be answered is does it take what is left of the Irish economy with it on its way down the tube.
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