In July 2018, the Irish Government published its National Policy Statement on Electricity Interconnection, a step welcomed by Greenlink as a major boost to investment. The announcement followed a consultation launched in January 2018. The new policy from the Department of Communications, Climate Action and Environment (DCCAE) recognises the benefits of interconnection to Irish energy security, competitiveness and sustainability - the three pillars of Irish energy policy - including benefits to consumers of “lower long term cost of electricity.”
Regulatory approval: UK and Ireland
In the UK, Greenlink was awarded an Interconnector Licence by Ofgem on 10th February 2015 and was awarded Initial Project Assessment (“IPA”) Status under Ofgem’s Cap and Floor Regime on 30th September 2015. This Cap and Floor regime is an arrangement introduced by the GB regulator to promote the development, financing and construction of interconnection with other European countries where demonstrably beneficial to consumers. By establishing the Cap and Floor structure after a consultation process, Ofgem has encouraged private capital to promote projects and thereby bring innovation, efficiencies and a drive toward cost reduction for the benefit of consumers. In awarding IPA status following extensive due diligence and analysis of the costs and benefits of Greenlink, Ofgem has gone a long way in validating the rationale for the project.
By their nature, interconnectors typically require the involvement and approval of the regulators for the electricity markets in each of the markets being connected. The IPA decision of Ofgem in respect of Greenlink is conditional upon the support of the regulator for the Irish Electricity markets, the Commission for Regulation of Utilities (CRU) (previously known as the CER). Element Power has actively engaged with the CRU since June 2014 regarding the Greenlink interconnector, and in May 2015 made a formal submission to them including a cost benefit analysis. The cost benefit study assesses all aspects of the economic impact of adding Greenlink to the Irish and GB markets on consumers, producers and other interconnector owners. The study shows a strong overall benefit, as well as for Irish consumers in particular.
The CRU published an information paper on 16th August 2016 informing the public and all relevant stakeholders of their decision to conduct a separate and distinct consultation process for the determination of interconnector policy.
In October 2017, the CRU announced that it was directing EirGrid to progress to the next stage any grid connection applications for electricity interconnectors with a Project of Common Interest (PCI), which includes Greenlink. This was an important step forward for the project.
In March 2018, investor confidence in interconnection and Greenlink was further boosted by the announcement by the CRU confirming commencement of its detailed assessment of the project, including consideration of a Cap and Floor regulatory support regime similar to Ofgem’s. In June 2018, the CRU launched a consultation on the ‘significant’ benefits of the Greenlink interconnector. The consultation paper, welcomed by Greenlink Interconnector Limited, details the expected Irish consumer benefits from the project and sets out a clear path to the project’s regulatory approval. The CRU states its intention to give an Initial Project Assessment (“IPA”) decision in respect of Greenlink by September 2018 if the project is likely to be in the public interest, which then leads to a Final Project Assessment (“FPA”) decision during 2019.
The sole responsibility of this publication lies with the author.
The European Union is not responsible for any use that may be made of the information contained therein.