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Irish energy levy will have significant impact

  • 13 years ago (2010-08-10)
  • David Flin
Europe 1072 North America 1004 Renewables 761

According to the American Chamber of Commerce in Ireland, plans to introduce an additional levy to electricity bills will reduce Ireland’s competitiveness. The Irish government and the energy regulator defended the decision to introduce the levy, which could lead to a rise of up to 5 per cent in electricity prices.

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Eamon Ryan, Ireland’s Minister for Energy, unveiled plans for the Public Service Obligation (PSO) levy last week. Coming into effect from October 2010, the levy is expected to raise up to €157 million, and will be used to offset costs faced by electricity producers obliged to buy a proportion of renewable and peat-generated electricity. Opposition politicians and consumer groups have opposed the levy, claiming that the increase in prices will put more pressure on consumers.

Michael Tutty, Chairman of the Commission for Energy Regulation, said that electricity prices had not increased for some time, and that the levy was needed to ensure security of future supply. He said: “The levy is just reflecting the actual costs that are out there. It is not that someone decided that there should be a price increase. The PSO levy is there to protect the consumer in the future through promoting renewables which will give us security of supply. We are very dependent on imported fossil fuels. Most of our electricity is produced from gas, which is almost all imported.”

Brendan Smith, the Minister for Agriculture, said that the levy was “absolutely necessary”, and that it would help the Government deliver on its EU targets for renewable energy. “The Government has a very strong green energy commitment to ensuring that we generate more of our energy needs throughout our own country through renewables, and through wind, tide and wave generation of electricity as well. If we don’t set about putting in place the necessary infrastructure to ensure security of electricity supply, down the road we could be in serious trouble,” He also defended the timing of the levy’s introduction, saying that prices had fallen in the past year by almost 24 per cent compared to the EU average.