Wednesday 2 November 2022

Energy Crisis - Part Two Electricity Bills

Three ways Electricity bills could be made more affordable:

1)   Most wind farms in Ireland are (hypocritically) profiting from the current higher gas prices (Weren't renewables supposed to do away with expensive dirty fossil fuels?). When gas prices were low in 2014 and 2015, wind farms were getting the gas price plus a top up to a fixed price. Now when gas prices are far exceeding this fixed price, they are receiving the massive surplus. So it is a lose - lose situation for the consumer. It is an arrangement that is indicative of the parasitic nature of wind energy which can only be accommodated in a grid dominated by fossil fuel or hydro generation. 

This win-win arrangement for wind energy could be reversed so that wind farms only receive the fixed price originally intended or if that is not legally possible, the excess profits taxed at a special rate and handed back to the consumer in the form of reduced electricity bills.

2)  Time to pass on those savings - when gas prices were low in 2014/15, hardly any of the fall in prices was passed on to consumers. See the following newspaper articles :

2015 - "most firms are dragging their heels in passing on recent falls in wholesale gas and electricity prices to consumers".

Make some electric savings by changing energy supplier -

2015 -  "Irish consumers pay the fourth-highest energy bills in Europe, according to EU statistics. Little of the large recent falls in wholesale gas and oil prices have been passed on to consumers".

Airtricity was paid €32m to run power station for just 50 hours -

Not for the first time in Ireland, a Regulator failed to do their job. Pressure could be put on the energy companies to pass on that saving now, in particular, ESB which is semi state. Failing that, a special tax could be introduced which would be based on the pro rata decrease in gas prices over that period seven years ago.  So if gas prices fell by 20% over one year back then, then corporate taxes on energy companies could be increased from 12.5% to 15% with the additional taxes passed on to consumers of course. This would provide some justification for the tax, rather than simply hitting the energy industry with an arbitrary tax. 

 3) And of course, cancelling all carbon taxes would reduce the cost of all types of energy.