DUBLIN, Ireland - Ireland’s electricity regulator has given the green light to the Greenlink interconnector between Ireland and the UK.
The decision by the Commission for the Regulation of Utilities that the interconnector is in the public interest and should be supported with a new regulatory regime, was handed down on Friday.
The ruling follows a public consultation by the regulator over the summer on the ‘significant’ positive impacts that will be realised for Irish electricity consumers and the increased security of supply that Greenlink will bring to the island of Ireland.
The Commission examined the project’s Cost Benefit Analysis to assess if it would be in the public interest for it to be considered as part of the Irish transmission system. The regulator also conducted its own Cost Benefits Analysis of Greenlink with support from independent advisors and, like Ofgem in the UK, concluded that the public interest test was met, the regulator said in a statement released on Friday.
Greenlink is a 205km 500MW interconnector project linking the electricity grids of Ireland and Great Britain. It is a €400 million privately-financed Project of Common Interest (‘PCI’), making it one of Europe’s most important infrastructure projects, and is due to commence construction in 2020.
In Friday’s announcement, the Commission confirmed that in the first half of 2019 it will go on to consult on the proposed ‘Cap and Floor’ regulatory regime to support Greenlink. Cap and Floor limits market exposure for consumers by setting a ceiling on the revenues that Greenlink can receive, whilst reducing the cost of the project by facilitating low cost equity and debt capital. A ‘Cap and Floor’ regime in Ireland would create a symmetrical regulatory regime in both Ireland and GB, further reducing the cost of financing.
“This decision sets Greenlink on the home straight to become Ireland’s next interconnector. The Irish Government has already published positive national policy on interconnection, recognising that projects like Greenlink will improve energy security, support decarbonisation and put downward pressure on consumer prices. We therefore welcome the CRU’s decision that Greenlink passes the public interest test and I am delighted that the regulators on both sides of the Irish Sea will now collaborate to help bring the project to fruition in 2023,” Simon Ludlam, the Project Director for Greenlink, said Friday.
Mike O’Neill, Chairman of Greenlink, said the decision, "is a clear vindication of our decision to develop the project and our shareholders’ ongoing support, which is rooted in fundamentals of the significant benefits that Greenlink brings as we move to a decarbonised world. This has enabled us to bring the project to an advanced stage of maturity, including the commencement of marine surveys and tendering for construction, which will create inward investment and jobs. Private capital has an important role to play in undertaking critical energy infrastructure investment such as Greenlink, and this regulatory framework facilitates this whilst protecting the consumer.”