Wales-Ireland electricity connector, the Greenlink interconnector received the go-ahead from Ireland’s electricity regulator, the Commission for the Regulation of Utilities (CRU).
The decision by the CRU stated that the interconnector was in the public interest and added that it should be supported with a new regulatory regime. Meanwhile, the determination by CRU makes way for the private capital financing of Irish interconnectors to meet new national policy objectives on interconnection.
The recent ruling follows a public consultation by the regulator over the summer on the positive impacts that would be realised for the Irish electricity consumers and the increased security of supply that Greenlink would bring to the island of Ireland.
The Commission examined the Cost-Benefit Analysis (CBA) of the project to assess if it would be in the public interest for it to be considered as a part of the Irish transmission system. Meanwhile, the regulator also conducted its own CBA of Greenlink. Independent advisors and Ofgem, the Office of Gas and Electricity Markets (GB Energy Regulatory Authority) in the UK supported the CBA and concluded that the public interest test was met.
Greenlink is a 205km 500MW interconnector project, which would link the electricity grids of Ireland and Great Britain. A €400 million privately-financed Project of Common Interest (‘PCI’), it is one of the most important infrastructure projects of Europe, which is due to commence construction in 2020.
In the recent announcement, the Commission confirmed that in the early half of 2019 it would consult on the proposed ‘Cap and Floor’ regulatory regime so as to support Greenlink. It is that Cap and Floor restrict market exposure for consumers by placing a ceiling on the revenues to be received by Greenlink while reducing the cost of the project by facilitating debt capital along with low-cost equity.
In the context, Simon Ludlam, the Project Director for Greenlink stated that the decision sets Greenlink to become Ireland’s next interconnector. And, the Irish Government had already published a positive national policy on interconnection, recognising that projects like Greenlink would improve energy security, and also support decarbonisation and put downward pressure on consumer prices. He added they were delighted that the regulators could collaborate to help bring the project to fruition in 2023. Meanwhile, Mike O’Neill, Chairman of Greenlink, stated that the decision was a clear vindication to develop the project and added that their shareholders’ ongoing support was rooted in fundamentals of the significant benefits that Greenlink brought to a decarbonised world. In the context, the CRU also stated that the new interconnectors should be built only to the extent that they benefit the public at large.