The Energy Regulator is proposing an increase in the Public Service Obligation (PSO) levy from October which could see electricity bills rising significantly.

The levy, which is charged to all electricity consumers, is designed to support the renewable energy sector in Ireland. 

It had previously been used to support the peat sector. 

"Following a review of the PSO cost submissions, the CRU's initial calculation is that a PSO levy of €480.11m will be required for the 2020/21 PSO year, which represents an increase of €303.65m on the 2019/20 PSO levy of €176.46m," the Commission for Regulation of Utilities said in a statement.

That amounts to a rise in the levy of over €70 a year for electricity customers. 

Once VAT is accounted for, the increase amounts to almost €110 a year.

"While the CRU is fully aware of the impact of any changes to the charges on a customer's bill, the proposed increase to a bill can be beaten by customers who renegotiate with their supplier or switch to a new provider where they could save over €300," Aoife MacEvilly, CRU Chairperson said.

Daragh Cassidy, Head of Communications with the price comparison website,, explained that renewable energy, although cleaner and better for the environment, is generally more expensive to generate than energy from burning carbon emitting fuels.

However, the proposed PSO levy increase comes at a time when coal, oil and gas prices are low by historical standards.

"Due to the falling price of energy, suppliers have announced some cuts to their electricity prices over the past few weeks, which will help offset this increase somewhat," he said.

"However a recent analysis by showed that energy suppliers, in most cases, have failed to reverse all the price increases they had implemented over the past two and a half years despite the plummeting price of energy on world markets with electricity prices around 15% higher than they should be," he added.