The Green Party have said that they support increasing the amount consumers pay for heating their homes as “increased costs of fossil fuel heating will also help make the move to electrify heating look like a more attractive option where it is suitable.”
The statement was made as part of the Green Parties submission to the Consultation on the Introduction of a Renewable Heat Obligation.
The introduction of such an obligation would require energy suppliers who produce greater than 400GWh of energy to ensure that a certain proportion of the energy supplied is renewable. This would mean suppliers will either have to generate renewable energy themselves, which may be rather difficult for some suppliers, or purchase “credits” from a supplier who produces sufficient quantities of renewable energy. Either option will likely see increased costs on the part of all non-renewable energy suppliers in Ireland.
The Green Party, in their submission, called for the removal of the 400GWh level, saying that it “should be set at a lower level to ensure all fuel supplies are obligated.”
As part of their submission the Green Party also stated they accept that “any scheme which increases the cost of fossil fuels has the potential to increase energy poverty.” They suggest that any penalties for non-compliance with the obligation are “ring fenced for fuel poverty alleviation measures, particularly for us in the insulation and retrofitting of homes.”
This obligation is being considered, despite the cost increases it is expected to cause, in order to help hit the targets laid out in the Climate Action Plan. The Department expects the initial rate of the obligation to be set at 0.5% initially, and for that to increase to at least 3% over the decade. The Green Party have called for the initial rate to be set at 1%.
The move is estimated to add 24-54 euro to consumer’s heating bill, although the Department of the Environment, Climate and Communication cautions that “it is not possible to determine with certainty the exact cost,” and that the above estimate assumes that “suppliers will source the lowest cost sustainable fuels…and spread the additional costs across their entire customer based equally based on their consumption.” If companies are unable to source the lowest cost sustainable fuel, which the Department believes to be biomethane, at the estimated price in sufficient quantities costs will increase.
The Green Party have said, as part of their submission, that they believe the increase in the cost of supplying energy which this obligation will cause should be passed directly to consumers.