Dáil Éireann Debate, Tuesday - 5 April 2022
180. Deputy Rose Conway-Walsh asked the Minister for the Environment, Climate and Communications the average cost of producing wind energy in the State; the average wholesale price of wind energy each month since January 2021, in tabular form; and if he will make a statement on the matter. [18155/22]
Amharc ar fhreagraThe Single Electricity Market (SEM) is the wholesale electricity market for the island of Ireland. The SEM is regulated by the SEM Committee and administration of the SEM is managed by the Single Electricity Market Operator. The SEM Committee comprises the two energy regulators, the Commission for Regulation of Utilities (CRU) and Northern Ireland’s Utility Regulator and an independent member.
In the SEM, all electricity generators, including gas and renewables, are obliged to sell their output into the “pool”. The wholesale price is based on the last bid by a generator that is accepted by the market operator to meet the demand for electricity at that time. The market operator accepts all the available renewable power and any other power source that has priority and then accepts the lowest bid followed by the next lowest and so on until the demand is matched by supply. The last bid required to meet demand sets the wholesale price for electricity. The operation and administration of the Single Electricity Market is managed by the Single Electricity Market Operator (SEMO). Market-related data, including monthly day ahead prices, is available in the public domain via the SEMO website: www.sem-o.com/.
According to the SEM Committee's most recent market monitoring report for Q4 2021, published February, the average day-ahead market wholesale prices in the SEM for Q4 2021 was €223.42/MWh with a highest average daily price of €378.35/MWh and lowest of €123.50/MWh.
Renewable energy generation such as wind lowers wholesale electricity prices during periods when they are generating power, highlighting the need to accelerate the delivery of renewable electricity projects and reduce our reliance on fossil fuels for energy generation.
The Renewable Electricity Support Scheme (RESS) is one of the major Government policies to help deliver on the ambition in the Climate Action Plan 2021 of up to 80% renewable electricity by 2030. Renewable energy projects compete under the RESS in auctions for support for a period up to 16.5 years under a two way floating feed in premium. This means that they receive the price they bid in at which for RESS-1 projects was an average of €74.08/MWh, which is significantly below the current average wholesale electricity price.
