Wind farm owner Greencoat Renewables’ results this week illustrate how successive governments’ efforts to boost investment in green electricity have locked families and employers into a bad deal. The figures give a clear view of how the power generation industry benefits from the Renewable Energy Feed-in Tariff (Refit) schemes.
These guarantee wind farms a minimum price for the power they generate, but also allow them to keep any surplus if wholesale prices exceed that figure. When wholesale prices were below the guarantee minimum, electricity customers made up the difference through a public service obligation charge on their bills. This effective tax cost them €2 billion over 20 years.
Greencoat this week calculated that the average wholesale electricity price in 2022 was €226 a mega watt hour (MWh), the unit in which it is traded. At the same time, Refit guaranteed it €83 MWh. A trawl through its results for the last few years show the company consistently highlighting the guaranteed tariff to investors.
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They also show the company was profitable when wholesale prices were well below this level, indicating that the guaranteed tariff ensured it could make money. This applies to all wind farms that Refit covers, which is most of them, as only a few are in the newer Renewable Energy Support Scheme, which forces generators to refund any surplus earned above the guaranteed minimum price.
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They are not the only ones benefitting. Greencoat’s results show that it has deals with energy companies, including Energia, Bord Gáis, SSE Airtricity and State-owned ESB. They buy electricity from its wind farms to sell on the wholesale market. Depending on various agreements’ terms, these organisations either take all the surplus paid over the minimum price for themselves, or they share it with Greencoat. This also applies across the industry.
The successive governments that created this include the three parties now in power, all of which backed the Refit system from the late ‘nineties on. They have ended up allowing the State itself, energy companies and big investors to profit from the wind industry’s cheap electricity, while the families and employers who paid it €2 billion in price supports face crippling bills.
