Denis Naughten (Roscommon-Galway, Independent) | Oireachtas source

I propose to take Questions Nos. 40 and 558 together.

EirGrid estimates that the cost of constructing the proposed North-South interconnector will be €286 million, with €180 million of this cost being incurred in Ireland and the remaining €106 million being incurred in Northern Ireland.

The proposed interconnector is a critical piece of energy infrastructure that will benefit all the people on the island of Ireland. Last November, the Northern Ireland Minister for the Economy, Simon Hamilton, and I confirmed our joint commitment to the ongoing development of the single electricity market. The new market arrangements will be in place in 2018 and will yield benefits for electricity market customers in the North and in the South.  The UK White Paper on Brexit, which was published last Thursday, noted that the UK is considering all options for its future relationship with the EU with regard to energy. The UK is particularly keen to avoid disruption to the single electricity market operating across the island of Ireland.

The North-South interconnector, which will further support the single electricity market and reduce costs for consumers, has received planning permission in Ireland and is in the planning process in Northern Ireland. This vital project, which will ensure the security of supply in Northern Ireland, is a further example of the interdependence of our energy systems. The interconnector will enhance competitiveness, bolster security of supply and remove a key barrier to the efficient operation of the electricity system across the island of Ireland.

It is envisaged that it will lead to initial savings of €20 million per annum, increasing to between €40 million and €60 million each year by 2030, shared between Ireland and Northern Ireland. Such cost savings will ensure there are benefits for every home and business in the State and will improve the competitiveness of businesses and the household disposable incomes of citizens. On this basis, I believe the proposed investment in our electricity infrastructure is a sound one.

The costs of developing the North-South interconnector are not borne by the Irish Exchequer. The project will be funded in the same way as other electricity and gas grid investments are paid for. These costs are approved by the regulator and charged by EirGrid, ESB Networks and Gas Networks Ireland to energy supply companies. The energy supply companies generally include these costs in customer bills.

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