Regulators have ruled out an electricity market change that would allow homes and businesses to benefit more from cheap wind power.
The Commission for Regulation of Utilities (CRU) calculates that wind-generated electricity will fetch €330.23 a mega watt hour (MWh) on average over the 12 months from October, making it extra profitable, as its production does not need expensive gas.
However, the commission has ruled out changing Irish wholesale electricity market rules, which tie prices to natural gas, to allow homes and businesses to benefit more from the availability of cheap wind power.
The CRU says that the wholesale market must allow generators to recover their costs. If the price is lower than the expenses faced by gas-fired power plants, then they will not produce electricity, risking the security of supplies. And if the price in Ireland fell below that in Britain, it could prompt electricity exports from here, also risking supplies, according to the commission.
Gerry Thornley: Irish rugby has become more than a little entitled and it doesn’t suit us
The man in Data Centre Alley couldn’t conceal his shock: ‘You’re screwed’
Lawyer Simeon Burke cannot get a master. Is this his own fault or due to an arcane system?
‘I laughed when a friend recommended I buy a single bitcoin when the price was €300. It would now be worth €55,000’
“Wholesale market design is a necessarily complex process and the last major redesign of the all-island electricity market — the I-SEM project — took four years to complete,” the CRU adds. The regulator also maintains that falls in wholesale prices may not immediately impact what homes and small businesses pay.
Will a European gas crunch affect Ireland?
Industry body Wind Energy Ireland says it has been pushing for some time for market rule changes that will reflect the growing availability of cheap renewable power. Justin Moran, its director of external affairs, argues that this will become more urgent as wind and solar energy account for up to 80 per cent of electricity by the end of the decade.
Most Irish wind farms are guaranteed either €72.69 MWh or €75.24 MWh for their electricity under the State’s Renewable Energy Feed-in Tariff (Refit) support scheme and are viable at those prices.
However, Wind Energy Ireland says they do not necessarily benefit from the high wholesale prices paid for their electricity, despite their lower generating costs.
Wind farms must sell their electricity to other generators to operate. Their agreements determine how the parties divide any upside between the guaranteed Refit price and the actual wholesale market price. Under those deals’ terms, the generators buying wind farm electricity could get all the upside, or split the difference, or pay renewable generators a small percentage.
