PSO Levy 2022/23: RESS to the Rescue

This week we look at how renewable generation is putting money back in consumers’ pockets – a trend which, based on the power price forecast from our All-Island Forward Curve report, is expected to continue until 2027.

Last week the Commission for Regulation of Utilities (CRU) published their final decision paper detailing the Public Service Obligation (PSO) levy for the period 1st October 2022 to 30th September 2023.

The PSO levy is a charge applied to all electricity consumers to cover the costs of support schemes introduced by the Irish Government. This is predominately to encourage investment in renewable generation through schemes such as the Renewable Energy Feed In Tariff (REFIT) and Renewable Electricity Support Scheme (RESS).

For the first time since the scheme began in 2010, the levy is negative, representing an income to the consumer rather than a cost. Domestic customers are set to receive €89.10 which will be welcome news in the current economic climate.

Recent global events have seen power prices increase significantly and due to the structure of the schemes supported by the PSO levy, high power prices lead to a reduction in consumer costs.

The REFIT scheme works as a top-up, meaning generators are guaranteed a price for the electricity they generate and if the market falls below this level they receive an extra payment which is covered by consumers. The higher market prices are, the smaller these top-up payments will be. The RESS scheme goes one step further, operating such that whilst generators will receive similar top-up payments, they will also make payments back if the market price is above the generator’s guaranteed price. In this case, when market prices go high enough, it can lead to the PSO levy going negative. In the 22/23 PSO levy, plant built under RESS 1 are responsible for 64% of the rebate.

There is also a reconciliation known as the R-factor which has resulted in a significant reduction in the PSO levy. This is a result of under forecasting the unprecedented high prices for the 20/21 PSO levy.

For consumers this shows that not only is renewable generation good for the environment, it can also provide tangible financial benefits.

For more analysis on the consumer cost impacts of RESS please get in touch with Andrew at

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