The overarching objective of the Government's energy policy is to ensure secure and sustainable supplies of competitively priced energy to all consumers.
The Public Service Obligation (PSO) levy is the support mechanism used for two very important objectives. Firstly, it supports electricity generation which was constructed for security of supply purposes, including peat generation. Secondly, it supports the development of renewable electricity which is important for both security of supply and for reducing carbon emissions from electricity generation. The levy is designed to compensate electricity suppliers for the additional costs they incur by purchasing electricity generated by these producers. It has been in place since 2001. 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 PSO Levy is a charge on all electricity customers without exception and is determined by the Commission for Energy Regulation (CER). The total amounts spent, and details by category, for each of the past ten years, are available in the public domain in annual CER PSO Levy Decision papers at www.cer.ie.
It should also be noted that from March 2016 the PSO levy will no longer support natural gas electricity generation, as supports for Aughinish and Tynagh thermal gas plants are terminated. Furthermore the PSO levy support for peat-fired generation at Edenderry Power Plant will end in December 2015. Lough Ree Power and West Offaly Power are the only remaining peat-fired electricity generation plants on the Irish electricity system. Support for such electricity generation will end for these plants after 2019.
The forthcoming White Paper on Energy Policy in Ireland, will inform future policy on the subsidisation of fossil-fuel derived energy sources.
