IPPToday #305: Irish energy regulator approves proposed US$460 million UK-Ireland interconnection
- Element Power
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Ireland’s electricity regulator, the Commission for the Regulation of Utilities (CRU), has determined that the Greenlink Electricity Interconnector, a 205km 500 MW transmission project linking the electricity grids of Ireland and Great Britain, is in the public interest and thus can be incorporated into the Irish transmission system.
The project proponent, Element Power, applied to the CRU for consideration of Greenlink's incorporation into the Irish transmission system for the purposes of calculating and imposing charges for use of the connection in December 2017. The company also sought the CRU's approval of its proposed charging methodology, which is based on a 25-year Cap and Floor regime.
Cap and Floor regimes operate to limit consumers’ financial exposure to interconnection projects. If the interconnector’s revenues exceed a maximum (the cap) then the excess is returned to consumers. Similarly, in the unlikely event that revenues fall below a minimum (the floor) then consumers top up the developer’s revenues to the level of the floor. This system is already in place under the UK’s energy regulator, Ofgem. The CRU has determined to consult on Element Power's proposed regime for Greenlink in the first half of 2019.
Greenlink is proposed to link the Great Island transmission substation in County Wexford (Ireland) and Pembroke transmission substation in Pembrokeshire (Wales), travelling underground and through the Irish Sea, and utilising high voltage direct current (HVDC) technology.
Element Power plans to commence construction in 2020 and achieve commercial operation by 2023.
The total estimated investment of the project is EUR400 million (US$460.5 million). It has already secured funding from the European Commission through the Connecting Europe Facility, which supports the development of high performing, sustainable and efficiently interconnected trans-European networks.
Greenlink passed an Initial Project Assessement and was granted a Cap and Floor regime by Ofgem in September 2015. The CRU intends to engage with Ofgem to explore the potential for a Final Project Assessment process that takes both the Irish and UK regulatory separate decision-making processes into account. The Final Project Assessment decision is expected to be made in 2019.