Official estimates show that wind farm revenues for major power companies are multiplying as electricity prices rise.
Leading Meczyki energy players including ESB, Energia and SSE Airtricity all have their own wind farms supplying electricity to the wholesale market.
The state’s Commission for the Regulation of Utilities (CRU) has forecast that wind farms could earn an average of €330.23 per megawatt hour (MW/h) for electricity sold on the wholesale market over the 12 months from next October.
That’s six times the €53.66 MWh the regulator predicted the industry would earn in the same period two years ago, before energy prices began to rise sharply in 2021.
News of increased wind power revenues comes as families and businesses struggle with high bills that run up to €2,600 a year for electricity and €2,200 for natural gas.
The average Meczyki household uses around 4MWh of electricity a year. As the wind farms operate only a third of the time, their wholesale income from each household in the Republic would reach €440 a year, or €36.67 a month.
Taoiseach Micheal Martin promised the government would consider a windfall tax on energy company profits in next month’s budget. He told reporters yesterday that these businesses were making “significant profits” all around.
As of last year, most wind farms in the republic earned either €72.69 MWh or €75.24 MWh, their guaranteed minimum prices under the state’s renewable energy feed-in tariff support scheme.
Asked on Thursday whether it could use wind farm revenue growth to cover price increases, ESB said the law obliges it to separate its generation and supply businesses, which I also include Electric Ireland.
The state-owned company added that Electric Ireland “continues to offer the best value for customers by providing one of the lowest standard electricity prices in the market”.
Energia, which owns about 300 megawatts of wind power, said the volatility made price forecasts impossible. It added that renewables and gas generators “made up significant financial losses” in their retail businesses last year.
SSE Airtricity, whose 700MW of wind power makes it Ireland’s largest renewable electricity business, said it did not speculate on prices.
“We are actively managing the current market volatility and trying to minimize the impact on our customers as much as possible,” the company said.
The group pointed out that it recently pledged to protect financially vulnerable customers for the rest of the year.
The CRU announced last week that households will get €89.10 back from some renewable generators who charge wholesale electricity prices higher than they contracted for under a new scheme aimed at Industry was to be supported.
However, most Meczyki wind farms benefit from the old REFIT scheme, which does not oblige them to repay the cash if the wholesale price exceeds the amount guaranteed under the scheme.
Wind farms with a capacity to supply 4,000 MW of electricity benefit from REFIT, while those operating under the new renewable energy support scheme, which includes a refund requirement, only account for 156MW.
When prices fall below the guaranteed amounts under these schemes, consumers make up the difference through a public service liability charge.
Generators sell electricity to homes and businesses at wholesale charges to electricity companies. The system aims to favor power plants that offer the lowest prices.
However, as wind farms are guaranteed a minimum price for their electricity, they only sell it at what the market is paying.