5. Irish consumers picking up the public electricity supplier’s bill to burn peat – one of the world’s dirtiest fossil fuels
Irish consumers pay surcharges on their electricity bill to compensate for state-owned company Electricity Supply Board (ESB) burning peat for electricity generation. Burning peat for electricity generation is not only uneconomic, its CO2 -footprint is multifold compared to other modes, notably because of its high inefficiency and damage to natural carbon sequestering environments.
The Irish Public Service Obligation (PSO) operates to support the burning of peat for electricity generation by state-owned company Electricity Supply Board (ESB), using peat mined by another state company Bord na Móna. It compensates the operator for the extra costs involved in burning what would otherwise be an uneconomic fuel. The levy is paid by all consumers of electricity through their electricity bills. 9% of the electricity used in Ireland is produced from burning peat. However, in terms of carbon pollution, peat burning for electricity represents 22% of CO2 emissions from electricity generation. The calculation of compensation includes the costs resulting from the purchase of emission allowances under the European Emission Trading System (ETS), thereby effectively putting the power plants outside the incentives of an emission trading system. The first built plant (Edenderry) whose PSO has expired is now being subsidised by a Renewable Energy Feed-In Tariff (REFIT). The distinctive feature of this tariff is that although it is ostensibly a renewable energy subsidy to support the use of biomass, it is a special tariff for co-firing with peat and is subject to a maximum of 30% biomass, minimum 70% peat. The payment support for the biomass element of the Edenderry power plant allows this plant to remain economically viable and allows it to continue operating while burning peat for 70% of the electricity generation. It is intended to transfer the other two plants to the REFIT in 2019.

In terms of impacts, peat is more dangerous than coal as a fossil fuel and its extraction damages the local environment in Ireland, notably in terms of losing natural carbon sequestration potential. The extraction and burning of peat has been proven to render permanent negative impacts in rural areas, including the threat of bogs completely disappearing.
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