Why energy costs are rising and what SSE Airtricity is doing for customers

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21st October 2022

Why energy costs are rising and what SSE Airtricity is doing for customers

At SSE Airtricity, we know the energy market is complex and understand that customers have questions about why our prices are impacted by wholesale energy costs when we supply renewable energy. 

Why wholesale costs affect the price of wind energy 

There’s one marketplace for buying energy on the island of Ireland, the Single Electricity Market (SEM) and electricity is bought and sold on a half hourly basis for the following day in a bidding process.

The system will always go for the cheapest, most efficient energy to meet demand first – this is almost always wind/renewables. However, the remaining energy needed to meet the total demand must then come from somewhere else. Recently, this has been gas-fired generation and it is this final generator who sets the price in that half hour. All generators, including renewables, are then paid this rate.

On windy days, when there are large quantities of renewables on the grid, wholesale energy prices decrease. Wind energy has provided 31% of Ireland’s electricity so far this year[1]. As more renewable energy is supplied to the market, Ireland’s reliance on fossil fuel energy will continue to drop and so too will energy prices for customers.

The ongoing energy crisis

In recent months, the global energy crisis has significantly increased the cost of fuel for thermal power stations. Even if wind or solar energy is used to meet 80% of demand at lower prices and the remaining 20% comes from a more expensive fossil fuel, all generators will be paid at the same rate as the fossil fuel generators. This increase in gas prices pushes the price of electricity up for everyone and has been the driving force of market increases in recent months. A recent CSO[2] report stated the price of wholesale electricity is now on average 86% higher than it was a year ago.

Supporting our customers

We understand that customers are facing challenges with the cost of living and energy crises. We’d hoped that market volatility would ease somewhat but as seen through extensive coverage of the global energy crisis, the war in Ukraine and resulting pressure on gas demands across Europe continues to disrupt energy markets in the UK and EU. These issues have driven wholesale gas prices to record highs; remaining at levels significantly higher than in previous years and directly affecting the ability of energy suppliers to keep prices low.

We’re committed to supporting and working with our customers, and we’ll continue to do so. Over the past few months, we have introduced increased supports for customers, and for those most impacted by the cost of living crisis, up to the value of €25m which includes initiatives such as;

  • A price promise that holds energy costs at June 2022 levels until the end of March 2023, for up to 60,000 financially vulnerable customers
  • €1 million discretionary fund to provide direct support to customers in difficulty
  • Delivering home energy upgrades for up to 600 vulnerable households, at no cost, to improve energy efficiency and heat retention measures for homes
  • €1 million donation to St Vincent de Paul (SVP) to support households in need of financial assistance, regardless of who their supplier is
  • £1 million donation to Bryson Charitable Group to support households in need of financial assistance during the current cost of living crisis

While we are contacting eligible financially vulnerable customers in relation to this fund, any customer experiencing difficulty can contact us and we will work with them towards a solution.

This is Generation Green

We’re striving to create a brighter energy future for our customers and the environment. Through SSE’s Net Zero Acceleration Programme, we continue to push forward and be the UK and Ireland’s clean energy champion. We source our electricity for our home and business customers through renewable energy sources, such as SSE’s 28 onshore wind farms across Ireland.

SSE is committed to being a leading renewable energy developer and supplier. That’s why SSE is investing €7 million a day into building and developing renewable infrastructure across the UK and Ireland. This will help ensure our energy future is greener and more secure by providing a balanced portfolio of renewable energy that will ultimately reduce our reliance on fossil fuels. SSE has ambitious plans for offshore wind and is investing up to €2.5 billion to develop phase two of Arklow Bank Wind Park to its full potential. When completed, the project will be capable of powering almost 850,000 homes each year and will have a transformative impact on the energy market.

This investment will help tackle energy prices for homes and businesses around Ireland and play a significant part in meeting the targets set out in the Climate Action Plan 2021. We’ll continue to champion green energy and green energy solutions as we support customers on their net zero journey.

Customer Support details

If customers are having difficulty with their bills, we recommend contacting our Customer Service team. Doing this as early as possible will help you avoid any unnecessary charges and give you the most flexibility with payments.

[1] Source: https://windenergyireland.com/latest-news/7124-wind-energy-monthly-report-24-of-ireland-s-power-provided-in-september
[2] Source: https://www.cso.ie/en/releasesandpublications/ep/p-wpi/wholesalepriceindexjuly2022/#:~:text=Wholesale%20electricity%20prices%20rose%20by,and%2047.0%25%20since%20June%202022.


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