Bernard Allen (Cork North Central, Fine Gael)
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Question 75: To ask the Minister for Communications, Energy and Natural Resources his views on whether the €600 million cost of the east west interconnector represents value for money in terms of construction and completion costs, versus similar projects in other parts of Europe. [18728/09]

Eamon Ryan (Dublin South, Green Party)
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EirGrid, with the approval of the Government, is developing to 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. The benefits for the economy, the energy market and consumers include:

· Enhancing security of energy supply by delivering additional capacity to the all-island electricity market and linking it to the UK, which is in turn connected to mainland European markets;

· Underpinning 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;

· Supporting further competition in the electricity market and exerting downward pressure on prices;

· Diversifying the national fuel mix and supply sources by reducing our dependence on electricity generated from imported natural gas; and

· Providing 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 of the project, 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 across Europe and around the world vary in terms of capacity, length, diversity of terrain and the proportion of the project that is sub-sea or on-land.

I can advise the Deputy that 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 Commission for Energy Regulation. Both EirGrid and 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 my Department, that the contract is economically advantageous and that EirGrid is on schedule to deliver the East West interconnector by 2012.