Revenue from wind farms owned by major power companies is multiplying as electricity prices soar, official estimates show.
Major Irish energy players, including ESB, Energia and SSE Airtricity, own wind farms that supply electricity to the wholesale market.
The State Commission for the Regulation of Public Services (CRU) forecasts that wind farms could earn an average of €330.23 per megawatt hour (MW/h) for the electricity they sell to the wholesale market during the 12 months from next October .
This is six times the €53.66 MW/h the regulator predicted the industry would earn over the same period two years ago, before power prices began to rise rapidly in 2021.
News of rising wind energy profits comes as families and businesses struggle with soaring bills amounting to €2,600 a year for electricity and €2,200 a year for natural gas.
The average Irish family uses around 4 MW/h of electricity in a year. As wind farms only run about a third of the time, their wholesale income from each household in the Republic would be closer to €440 per year, or €36.67 per month.
Taoiseach Micheál Martin promised that the government would consider an extraordinary tax on the profits of energy companies in next month’s budget. He told reporters yesterday that these companies were making “significant profits” overall.
Until last year, most of the wind farms in the Republic earned €72.69/h or €75.24/h, the minimum prices guaranteed by the State Renewable Energy Supply Rate support regime.
Asked on Thursday whether it could use the boost in profits from wind farms to offset price increases, the ESB said it is required by law to separate its generation and supply businesses, which includes Electric Ireland.
The state-owned company added that Electric Ireland “continues to offer the best possible value to customers by providing one of the lowest standard electricity rates on the market.”
Energia, which owns around 300MW of wind power, said volatility made price predictions impossible. He added that gas and renewable generators last year “offset significant financial losses” in its retail business.
SSE Airtricity, whose 700 MW of wind power makes it Ireland’s largest renewable electricity company, said it was not speculating on prices.
“We are actively managing the current market volatility and seeking to minimize the impact on our clients as much as possible,” the company said.
The group noted that it recently committed to protecting financially vulnerable customers for the rest of the year.
The CRU announced last week that households would receive a €89.10 rebate from some renewable generators receiving higher wholesale electricity prices than those they contracted for under a new scheme aimed at supporting its industry.
However, most Irish wind farms benefit from the old REFIT scheme, which does not require them to pay back in cash if the wholesale price exceeds the amount guaranteed by this scheme.
Wind farms with the capacity to supply 4,000MW of electricity benefit from REFIT, while those operating under the new Renewable Energy Support Regime, which includes the return requirement, only amount to 156MW.
When prices fall short of the amounts guaranteed under these schemes, customers make up the difference through a public service obligation charge.
Generators sell electricity at wholesale prices to companies that supply power to homes and businesses. The system is intended to favor power plants that offer the lowest prices.
However, as wind farms get a guaranteed minimum price for their electricity, they simply sell it at the price the market pays.