Public could face extra charge for electricity under green subsidy scheme

New plan means if electricity prices fall below a guaranteed figure the public will cover the difference through a levy

Families and employers face potential extra charges on their electricity bills after the Government announced details of a new green energy subsidy scheme.

Outgoing Minister for Energy Richard Bruton, announced details of the new Renewable Energy Support Scheme (RESS) for wind- and solar-powered electricity on Thursday.

Under its terms wind and solar farms will get guaranteed prices for the electricity they generate. The department confirmed that if electricity prices fall below the guaranteed figure, homes and businesses will have to cover the difference through a public service obligation levy on their electricity bills.

This could result in families and employers facing an extra charge on their electricity bills to fund the new scheme.


However, a department spokeswoman pointed out that the scheme would work both ways. Generators would have to repay the difference to consumers if electricity prices were higher than the figure that they were guaranteed.

Currently homes pay €2.84 a month and small businesses €10.35 a month through the public service obligation that is added to all electricity bills.This funds guaranteed prices paid to wind farms under the Government’s existing Renewable Energy Feed-in Tariff scheme, which the new system will replace.

Prices under the RESS will be set at auctions that favour cheaper suppliers. The first of these will be held next month, and successful companies will be told in June. They will have to begin generating power within about two years.

Price cap

The department’s spokeswoman said that the system would include cost-control measures, including a price cap and an assessment of the amount of renewable energy needed.

“In addition to RESS it is expected that a significant volume of renewable energy projects will be supported without subsidy through corporate power purchase agreements,” the spokeswoman added.

Noel Cunniffe, the Irish Wind Energy Association's head of policy, argued that the scheme would ensure that only projects that offered electricity at the best possible price would succeed. "It is now essential that the Government moves ahead to ensure the auction concludes on time in June."

Barry O'Halloran

Barry O'Halloran

Barry O’Halloran covers energy, construction, insolvency, and gaming and betting, among other areas