CRU Publishes PSO Levy Calculations for 2024/25

The PSO Levy is a key factor in enabling Ireland to meet its national targets in terms of the generation of electricity from renewables.

Following a review of the PSO cost submissions from eligible suppliers, the final PSO Levy of €251.79 million will be required for the 2024/25 PSO year, which represents an increase of €251.79 million on the 2023/24 PSO Levy which was set to zero.

Previously the PSO funding requirement for the PSO Year 2023/24 was -€67.47 million. While the PSO funding requirement was still negative, it represented an increase from the 2022/23 PSO funding requirement of -€491.25 million. 

The CRU made the decision, given the reduced payment due to customers last year, to set the levy at zero to reduce the impact of the expected higher charges on customer bills in 2024/25.

The increased funding requirement for 2024/25 was a result of the inverse relationship between the PSO and the wholesale electricity price. When wholesale electricity prices are lower, mostly because of reduced gas prices, renewable generators, which do not require gas, receive lower revenues for the electricity they sell in the wholesale market.

As a result, for the forthcoming PSO Year 2024/25, it is estimated that increased support will be required from the PSO for renewable generation under the older REFIT renewables support scheme and the newer RESS support scheme.

In the PSO Levy period 2022/23, the negative funding requirement resulted in domestic customers receiving a PSO payment for the first time on their bills of €89.10.

Commenting on the decision, John Melvin, CRU Director of Wholesale Markets said: “While the previous two PSO years saw a PSO credit and zero payment being applied to customer bills, the PSO Levy’s inverse relationship with wholesale fuel costs means that this year renewable generators require much greater support under the Government schemes. The increase this year has been offset by the decision of the CRU last year to set the PSO Levy at zero given the comparatively smaller payment that year to reduce the impact of these higher charges on customer’s bills for this forthcoming year."

The decision that has been published can be found here.