Eamon Ryan (Dublin South, Green Party)

I apologise for being late. I was delayed because a broadcasting question came up on the Order of Business and I had to advise the Taoiseach.

Regarding the funding of the interconnectors, we must resolve the east-west interconnector this summer. We seek to have the project completed by 2012 and this requires us to sign off on contracts quickly. The funding issue has yet to be completely finalised. It is a regulated asset so there is a certain guarantee of income streams from the use of that asset. The cost is ultimately borne by the consumers in the sense that any regulated part of the transmission or other asset system is part of the market cost of electricity. The advantage of greater interconnection is that it has the potential to reduce our costs by creating a more efficient system, a better market and allowing us to export green electricity and import electricity at peak times when it is very expensive to switch on power plants here. The long-run effect of the introduction of greater interconnection is to bring prices down. While there is a short-term cost in paying for such assets, they are beneficial. As to the exact financial mechanism, whether it is 100% or 80% debt and 20% capital funding from the Exchequer or the National Treasury Management Agency, the project will have the capital funding to allow it to proceed, as will the North-South interconnector, which is of equal importance, particularly in terms of developing an all-Ireland electricity market.

We have North-South interconnection on one section but the shortage of further interconnection has a significant effect on the efficiency of the all-Ireland energy market we have entered. The benefit of the North-South interconnector is that it will deliver energy supply to counties Cavan and Monaghan, which will not be suitable locations for foreign direct investment in the absence of that. Investors are looking for good electricity supply, particularly for new digital technology industries. Another benefit is that it allows us to operate the North-South all-island electricity market in a more efficient way and reduce costs.

I am cognisant of the concerns of residents along any potential route. That is why we commissioned a report, carried out by a leading firm of international consultants, Ecofys, which is being completed and will be before the Government and the Joint Committee on Communications, Energy and Natural Resources, which can interview the consultants to provide more detail on the findings. This may allay the concerns of constituents, particularly those in the Cavan-Monaghan constituency. I do not wish to determine what will be in the report or the questions of the Joint Committee on Communications, Energy and Natural Resources but an initial examination of international practice in this area suggests this is not an easy technical fix with an obvious alternative that we could develop. The consultants will consider a variety of relevant issues, including health, the environment, technical feasibility of engineering, and management of electricity. The consultants' report will examine these in more detail.

I have confidence in the ability of EirGrid to deliver these interconnectors. EirGrid is proceeding in a professional and proper manner. At times when electricity prices are rising and we are facing a major shift in energy policy because of the international increase in the price of fossil fuels, the east-west interconnector provides a long-term response to high energy prices and it is crucial that it is delivered on time. I am keen to support EirGrid, as is the Government, to help it to do this.