James Reilly (Dublin North, Fine Gael)
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Question 429: To ask the Minister for Communications, Energy and Natural Resources if he will clarify the cost implications regarding the provision of an electricity interconnector between Ireland and Wales and in particular the claim in a newspaper (details supplied) that an alternative company claims it can build an interconnector at 33% of the cost of the State body EirGrid; if a competition was held as recommended by the Government to the Commission for Energy Regulation in 2006; and if he will make a statement on the matter. [24888/09]

Eamon Ryan (Dublin South, Green Party)
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EirGrid, with the approval of the Government, is developing the East West Interconnector to schedule. The Government is fully committed to the cost effective delivery of the interconnector in the interests of consumers as a key strategic energy infrastructure project.

The Government decided in 2006 that the interconnector will, as a national strategic asset, remain in public ownership and will be owned and operated by EirGrid. The contract for the development of the East West interconnector was awarded to ABB on foot of an open, competitive tender process conducted by EirGrid under the regulatory oversight of the CER. I am satisfied with EirGrid's assurance that the contract represents value for money and will ensure cost-effective delivery of the project to schedule.

The Government has also been advised by EirGrid and the Commission for Energy Regulation (CER) that over the lifetime of the interconnector, the benefits will more than outweigh the development costs. 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.

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 to the project. In making cost comparisons it is the case that each electricity interconnector project is a unique development. Interconnectors may vary in terms of capacity, length, diversity of terrain and the proportion of the project that is sub-sea or on land.