Belfast Telegraph

Green energy prices 'not passed on to Northern Ireland consumers'

Lower electricity prices generated by renewable energy are not being passed on to householders, the Consumer Council said.

Wind power producers are profiting because the cost is set by the more expensive fossil fuel needed to meet demand in the system. This means they may be over-rewarded for the electricity they generate, the lobby group added.

The council published an analysis of the electricity market today.

Chief executive Antoinette McKeown said: "The right level of incentives is needed to increase the amount of renewable generation but developers should not be over-rewarded to the detriment of customers."

According to the organisation, the average electricity bill in Great Britain is £530 a year compared to £588 a year in Northern Ireland.

It said consumers were bearing more risk from higher costs than shareholders in electricity companies and prices were greater because energy policy is "confused and contradictory".

The council warned the benefits from renewable energy like wind are not being seen by customers as power within the single electricity market (SEM) is set by the most expensive fossil fuel generator needed to meet demand on the system.

Prices from fossil fuel generators include the cost of carbon and fossil fuel and because renewable generators do not produce carbon or use fossil fuels therefore may be overpaid for the electricity they provide.

Ms McKeown said Northern Ireland needs a clear and detailed energy policy.

"We want to see the issue of affordability, security of supply and sustainability to be looked at in the round," she added.

"When the price is set it is the last price and generally that is a gas or coal-fired plant."

A spokesman for wind company Airtricity said: "At Airtricity, our customers can see the benefit of wind generation in the cost of the energy we provide.

"We calculate our forward price curve up to a year in advance to take into consideration the variable nature of wind generation and we build in the estimated savings from wind which we can pass on to our customers.

"In this way we can continue to offer customers electricity that is 14% cheaper than Power NI."

He said customers enjoy the benefits of wind generation in the energy price they pay as tariffs reflect the annual savings from displacing expensive fossil fuel-fired generators on the system.

"Wind generation is highly variable and can literally change by the hour. Current metering technology means it is not possible to offer day-to-day tariffs to customers that would reflect these changes," he added.

"In time, smart metering and dynamic pricing will reflect this variability on wholesale energy costs in customer tariffs.

"However in the meantime the day-to-day benefit of wind generation will continue to be reflected in tariffs that are typically calculated on an annual basis."

The council's latest report is based upon work carried out by former electricity regulator Douglas McIldoon in 2008.

Householders in Northern Ireland could be paying an extra £20-30 a year for electricity because of the limited cross-border connection, the council added.

The lack of interconnection between Northern Ireland and the Republic is costing customers more than £18 million annually, the lobby group added.

A battle is still being fought between proponents of a plan to build an interconnector on pylons from the Republic through Co Armagh and residents and landowners who fear its impact on the environment and health.

Ms McKeown added: "We are in favour of an interconnector at the lowest cost to the consumer."

The lowest cost is to mount the connector on pylons.

The chief executive said subsidies for wind generation vary between Northern Ireland and the Republic, meaning generators will not necessarily be located in the optimum location for the network but where the greatest financial gain may be.

The council said currently supplier Power NI can minimise the risk to its shareholders by fully passing through its energy procurement costs to customers and by recovering any shortfall from customers, meaning there is an inequitable distribution of risk between customers and shareholders.

Ms McKeown added: "The consumer is the failsafe mechanism for the industry."

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