Enda Kenny (Mayo, Fine Gael)
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Question 403: To ask the Minister for Communications, Energy and Natural Resources if his attention has been drawn to an EirGrid publication in 2004, based on extensive computer modelling of the Irish electricity generation plant mix, entitled Impact of Wind Power Generation in Ireland on the Operation of Conventional Plant and the Economic Implications (details supplied); the estimates of the annual cost to the consumer here, in terms of fuel requirement, fuel cost, amount and value of emissions; the decline in the efficiency of fossil fuel plant for each of the next ten years; the action he has taken or plans to take to optimise the efficiency of the electricity generating sector; and if he will make a statement on the matter. [33451/08]

Eamon Ryan (Dublin South, Green Party)
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I am aware of the analysis published by EirGrid in 2007, which provides a framework to assess cost implications of wind powered generation under a range of scenarios. EirGrid advise that the framework supersedes the study they published in 2004. It is also the case that since the 2007 framework was published fossil fuel prices have risen exponentially and the Single Wholesale Electricity Market has been established. EirGrid, as Ireland's systems operator, is committed to supporting the delivery of renewable energy and to meeting the challenges for the electricity system and the most effective and efficient operation of the overall generation portfolio. The Generation portfolio is changing with the prospective development of more flexible plant which EirGrid advocates and supports. EirGrid also considers that the Single Electricity Market design supports the addition of more flexible plant, which is reflected in the increased level of interest in such plant.

It is the responsibility of EirGrid to optimise the efficiency of the generation portfolio through, inter alia, the dispatch daily arrangements for all generating plants. I welcome the fact that EirGrid as Systems and Market Operator is committed to delivering increased penetration of renewable energy. As fossil fuel and carbon prices continue to rise, renewable energy technologies come into their own. My Department has requested ESRI to analyse the economic and financial costs and potential impact on electricity prices of Ireland's ambitious renewable energy targets. That work will be completed by year end. The Commission for Energy Regulation is also undertaking jointly with the Northern Ireland Regulator analysis of the impact of wind generation in the Single Electricity Market. This analysis will be completed shortly.

Enda Kenny (Mayo, Fine Gael)
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Question 404: To ask the Minister for Communications, Energy and Natural Resources the specification of the proposed east-west electricity interconnector; the cost of this project; the way it will be financed; the payback period of same; the services it will provide to the electricity grid; the estimated value of these services; if funding has been obtained from outside the State; and if he will make a statement on the matter. [33452/08]

Eamon Ryan (Dublin South, Green Party)
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The East-West Interconnector is a 500MW High Voltage Direct Current (HVDC) interconnector, which will link the electricity grids of Ireland and Britain. This project is of strategic national importance to Ireland and its delivery to schedule by 2012 is a key Government priority. The interconnector will enhance the reliability and security of electricity supply, promote competition in the market and facilitate the integration of renewables.

EirGrid has been entrusted with the development and ownership of this interconnector by the Government. Working closely with the CER and with my Department, Eirgrid is progressing the project to schedule. The Electricity Regulation (Amendment) (EirGrid) Act 2008 provides the necessary legal basis for EirGrid to construct, own and operate an interconnector.

I am advised that EirGrid expects the contract for design and construction of the interconnector to be completed by late 2008, when the successful bidder will be announced. EirGrid has secured Woodland in County Meath as the connection point for the interconnector on the Irish transmission system and Deeside in Wales on the UK side. Furthermore, EirGrid has undertaken a marine survey to determine the most suitable route for the undersea cable. Late 2011 is the target for the completion of works and 2012 is the target for the completion of commissioning and testing and the start of commercial operations. The project remains on track to meet these target completion dates, subject to the outcome of the planning processes.

Financing options for this project are being pursued by EirGrid with the objective of achieving the most cost-effective and efficient financial package.

The project is being funded in two phases. Phase 1 will cover the initial funding requirements and Phase 2 will cover the majority of the construction element. EirGrid has gone to the market for proposals in relation to Phase 1. Once the Phase 1 funding package is in place, EirGrid will proceed to seek proposals in relation to Phase 2. This phase will cover the bulk of funding requirements. EirGrid has also initiated discussions with the European Investment Bank, with a view to their participation in Phase 2.