An increase in the number of onshore wind farms in use will likely contribute to a fall in the wholesale power price in Ireland over the next three years, but consumers won’t see the benefit.

A new Moody’s Investor Services report forecast a decline in the wholesale power price of between €53 to €58 per megawatt hour. This fall is more gradual that the 15 per cent decline recorded in 2013 and 20-14, which was primarily the result of a drop in global oil and gas prices.

However, Moody’s said only part of the reduced cost would be passed onto consumers because the new assets will come with increased subsidy costs.

“Continued deployment of onshore wind farms, declining demand on the transmission system, and the return to full service of the Moyle Interconnector will put pressure on prices in the second half of this decade”, said Matthew Huxham, Moody’s assistant vice president and analyst. “However, the decline will be forestalled by the effect of reduced interconnector imports in 2015 and 2016, and less coal-fired generation from 2016.”

The agency said the lower power price will reduce earnings for owners of conventional power generation and non-subsidised renewable generation, which includes the ESB and Viridian. It added that ESB is more exposed as its more diversified generation portfolio means that its earnings have further to fall than Viridian, for whom energy market earnings from its Huntstown gas-fired power plant have been slim in recent years. It added the reduction in earnings should be manageable for both companies at their current rating levels.

Moody’s said the shape of the electricity market in Ireland could change significantly under the forthcoming I-SEM framework, which is currently being designed.