| Lower electricity prices generated
by renewable energy are not being passed on to householders,
the North's Consumer Council has said.
Wind power producers are profiting because the cost is set
by the more expensive fossil fuel needed to meet demand in
the system. This means they may be over-rewarded for the electricity
they generate, the lobby group added.
The council has published
an analysis of the electricity market.
Chief executive Antoinette McKeown said - "The right level
of incentives is needed to increase the amount of renewable
generation, but developers should not be over-rewarded to
the detriment of customers."
According to the organisation, the average electricity bill
in Great Britain is £530 a year compared to £588 a year in
Northern Ireland. It said consumers were bearing more risk
from higher costs than shareholders in electricity companies
and prices were greater because energy policy is "confused
and contradictory".
The council warned the benefits from renewable energy like
wind are not being seen by customers as power within the single
electricity market (SEM) is set by the most expensive fossil
fuel generator needed to meet demand on the system.
Prices from fossil fuel generators include the cost of carbon
and fossil fuel and, because renewable generators do not produce
carbon or use fossil fuels, therefore may be overpaid for
the electricity they provide.
Ms McKeown said Northern Ireland needs a clear and detailed
energy policy.
"We want to see the issue of affordability, security of
supply and sustainability to be looked at in the round," she
added. "When the price is set it is the last price and generally
that is a gas or coal-fired plant."
A spokesman for wind company Airtricity said - "At Airtricity,
our customers can see the benefit of wind generation in the
cost of the energy we provide. We calculate our forward price
curve up to a year in advance to take into consideration the
variable nature of wind generation and we build in the estimated
savings from wind which we can pass on to our customers.
"In this way, we can continue to offer customers electricity
that is 14% cheaper than Power NI."
He said customers enjoy the benefits of wind generation
in the energy price they pay as tariffs reflect the annual
savings from displacing expensive fossil fuel-fired generators
on the system.
"Wind generation is highly variable and can literally change
by the hour. Current metering technology means it is not possible
to offer day-to-day tariffs to customers that would reflect
these changes," he added.
"In time, smart metering and dynamic pricing will reflect
this variability on wholesale energy costs in customer tariffs.
However, in the meantime, the day-to-day benefit of wind generation
will continue to be reflected in tariffs that are typically
calculated on an annual basis."
The council's latest report is based upon work carried out
by former electricity regulator Douglas McIldoon in 2008.
Householders in Northern Ireland could be paying an extra
£20-30 a year for electricity because of the limited cross-border
connection, the council added.
The lack of interconnection between Northern Ireland and
the Republic is costing customers more than £18 million annually,
the lobby group added.
A battle is still being fought between proponents of a plan
to build an interconnector on pylons from the Republic through
Co Armagh and residents and landowners who fear its impact
on the environment and health.
Ms McKeown said - "We are in favour of an interconnector
at the lowest cost to the consumer."
The lowest cost is to mount the connector on pylons.
The chief executive said subsidies for wind generation vary
between Northern Ireland and the Republic, meaning generators
will not necessarily be located in the optimum location for
the network but where the greatest financial gain may be.
The council said currently supplier Power NI can minimise
the risk to its shareholders by fully passing through its
energy procurement costs to customers and by recovering any
shortfall from customers, meaning there is an inequitable
distribution of risk between customers and shareholders.
Ms McKeown added - "The consumer is the failsafe mechanism
for the industry."
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