Eamon Ryan (Dublin South, Green Party)

EirGrid, with the approval of the Government, is developing, on schedule, the east-west interconnector. The Government is fully committed to the cost effective delivery of the interconnector as a key strategic energy infrastructure project.

There are several benefits for the economy, the energy market and consumers from this development. It will enhance security of energy supply by delivering additional capacity to the all-island electricity market and linking it to the United Kingdom, which is, in turn, connected to mainland European markets. It will underpin delivery of Ireland's renewable generation targets by providing additional back-up at times of low wind and enabling the export of wind energy from Ireland at times of high wind generation. It will support further competition in the electricity market and exert downward pressure on prices. It will allow for a diversification of the national fuel mix and supply sources by reducing our dependence on electricity generated from imported natural gas. In addition, it will provide EirGrid, as the system operator, with important back-up and reserve services.

The Government has been advised by EirGrid and the Commission for Energy Regulation, CER, that over the lifetime of the project, these benefits will more than outweigh the development costs. In a strong endorsement by the European Union, Ireland has secured €110 million for the east-west interconnector under the European economic recovery plan. This funding will be an important component of the overall financial package. In making cost comparisons, it should be borne in mind that each electricity interconnector project is a unique development. Interconnectors throughout Europe and elsewhere vary in terms of capacity, length, diversity of terrain and the proportion of the project that is below sea or on land.

The contract for the development of the east-west interconnector was awarded on foot of an open tender process conducted by EirGrid under the regulatory oversight of the CER. Both EirGrid and the CER have advised that the contract price negotiated with the successful bidder represents full value for money in a very competitive process. I am satisfied, on the basis of the comprehensive advice by EirGrid and CER to me and to my Department, that the contract is economically advantageous and that EirGrid is on schedule to deliver the east-west interconnector by 2012.

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