Eamon Ryan (Dublin South, Green Party)

That will largely depend on the price of gas. With 60% of electricity generated by gas, its price very much determines electricity prices. The regulator and the generators will be looking at the price of gas.

The PSO has two effects. The PSO on peat-fuelled plants was based on security supplies and an unemployment argument for the midlands concerning the operation of Bord na Móna plants there. The wind PSO levy, on the other hand, was introduced more recently. The two of them come down 50:50 as to how the PSO is applied.

The peat levies have two timelines, one for five years while the other is longer. It might be difficult to get a PSO approval for peat plants given the high carbon emissions from such plants. I am seeking an extension from Brussels on the wind levy because it works in giving a stable investment environment in wind power generation which is the best hedge against volatile gas prices. Much analysis has been done to show that even though there may be an upfront cost in the PSO level, its overall impact will be to bring down market prices because of a greater diversity of supply.

The PSO standing at €200 million will mean a 4% to 5% rise in overall electricity prices. That is not taking into account the portfolio effect that one gets from having diverse supplies. Further modelling would be required to see the exact effect.

We have brought down electricity prices significantly in the past two years, largely because of competition but also because of falling gas prices. Projections from the International Energy Agency see gas prices remaining relatively low and stable for the next five years. That gives us an opportunity to build a wind alternative supply which will give us, in the long run, more stable and lower electricity prices.

See this speech in context