Written answers

Tuesday, 27 January 2015

Department of Communications, Energy and Natural Resources

Public Service Obligation Levy

Photo of Eoghan MurphyEoghan Murphy (Dublin South East, Fine Gael)
Link to this: Individually | In context | Oireachtas source

569. To ask the Minister for Communications, Energy and Natural Resources his views that an adjustment to the public service obligation, PSO, levy should be made considering the changing market forces (details supplied). [3799/15]

Photo of Alex WhiteAlex White (Dublin South, Labour)
Link to this: Individually | In context | Oireachtas source

The Public Service Obligation (PSO) levy has been in place since 2001 and is the overall support mechanism for generation constructed for security of supply purposes, including peat generation, and for the development of renewable electricity. It is designed to compensate electricity suppliers for the additional costs they incur by purchasing electricity generated by these producers. The PSO levy is vital to enable Ireland to meet its 40% target for electricity generated from renewable sources by 2020, which in turn is important for the achievement of Ireland's 16% EU 2020 target for renewable energy.

The Commission for Energy Regulation (CER) determines the PSO levy which is a charge on all electricity customers without exception. The legal basis for the PSO levy and its method of calculation are set out in Regulations made under the Electricity Regulation Act 1999 (S.I. 217 of 2002). The annual PSO levy amount for 2014/2015 is €335.4 million. This equates to €64.37 per annum for residential customers, €221.66 per annum for small to medium sized business customers and €34.20/kVA for medium and large customers.

Tynagh Energy was one of two plants awarded a 10 year contract as a result of a competition run by the CER to provide urgently required capacity to the electricity system. The purpose of the scheme was to ensure security of supply in the framework of continuous electricity demand growth. The 10 year contract ends in 2016 and the plant will not receive compensation from the PSO levy for electricity generated after this date. Having been awarded 15 year contracts to ensure security of supply, the peat plants are also transitioning out of subsidy. Edenderry Power will be out of subsidy from the end of this year and Lough Ree and West Offaly power plants will be out of subsidy at the end of their contracts in December 2019.

Comments

No comments

Log in or join to post a public comment.