Information Note on East West Interconnector Revenue Requirement
On 27 July 2006 the Minister for Communication, Energy and Natural Resources ("the DCENR") requested that the Commission for Energy Regulation ("The CER") arrange the design of competition to secure the construction of one 500MW East West interconnector and that this interconnector be owned by EirGrid. Following this request the CER engaged EirGrid to develope the interconnector project. This interconnector is known as the East West Interconnector ("EWIC") and is currently on target and ahead of budget to come into commercial operation in September 2012. With the approval of the CER EirGrid transferred ownership of the EWIC to EirGrid interconnector Limited ("EIL"), a wholly owned subsidiary of EirGrid.
This purpose of this paper is to inform industry and the wider public on:
- The background to the EWIC;
- The background to the financing arrangements
already entered into;
- The level of revenue requested by EirGrid for
the repayment of debt, operation and
maintenance of the EWIC
- The analysis of these requirements and the
CER's decision on the level of allowed revenue;
- The appropriateness and level of incentives that
should be placed on EirGrid relating to the
return on its equity share in the EWIC project.
- The appropriateness and level of incentives
that should be placed EirGrid relating to
maximising the operational availability of the
EirGrid has submitted, in its capacity as owner of EIL, a proposal relating to the revenue required for the support of the EWIC. The CER is publishing its decision on the level and treatment of these revenues.
On 15th August 2011 EirGrid Interconnector Limited ("EIL") applied for an Interconnector Operator Licence under the Electricity Regulation Act, 1999 (as amended) to operate the East West Interconnector ("EWIC").
The CER has granted the Operator Licence, effective from 7th October 2011.
The CER is publishing the Interconnector Operator Licence as granted to EIL and a letter temporarily suspending Conditions 10 and 11 until such times as the auction of capacity commences and until the construction of the EWIC is complete and operational.
To view this licence and the letter please click on the below:
East West Interconnector Access Rules Approval
On 7th October 2011 the CER published approved Interconnector Access Rules for EirGrid Interconnector Limited. The access rules and approval letter are available below.
Additional benefits could be gained if the Irish transmission system was interconnected with the UK system which would in turn ensure that the Irish electricity market would be more closely integrated into the wider European energy market.
A government decision has been made to examine the possibility of building an east-west interconnector and the CER has been asked to investigate the matter further. In March 2004 the CER engaged a KPMG-led consortium to advise on the financial, technical, commercial and procurement aspects of new interconnection between Ireland and Wales. In September 2005, KPMG submitted a report to the CER on the issue and the CER has presented the recommendations of the report to the Minister for Communications, Marine and Natural Resources.
Following on from the publication of the Green Paper "Towards a Sustainable Energy Future for Ireland" the Government outlined its decision in relation to the East-West Interconnector (EWIC) Project. A letter to the CER Chairman from the Department of Communications, Marine and Natural Resources which outlines this decision, is available below. The Government Decision deals with, among other things, the capacity of the Interconnector, its ownership by EirGrid, a competition for its construction to be designed by the CER and the next steps in taking this project forward for completion at the earliest possible date before 2012.
Letter from the Department dated 27 July 2006 and anticipated a public announcement
Letter to Commission Chairman from DCMNR re East-West Interaconnector Project - 27 July 2006 cer06194.pdf
Route Selection 9 August 2007
The CER is directing EirGrid to reserve transmission capacity to accomodate the 500MW interconnector project, which will be connected and accomodated on the system at the Woodland transmission station, no later than the end of 2011. This follows a consultation on this topic which concluded on 27 July 2007.
To view the CER's Direction to EirGrid, please click on the link below:
Reserving System Access Capacity for East West Interconnector cer07117.pdf
To view the Responses received to the consultation please click on the links below:
Viridian response to CER Consultation on connection of E-W interconnector cer07118.pdf
EirGrid Response to consultation on E-W interconnector connection cer07119.pdf
Connection to the Irish Grid
The CER has written to EirGrid agreeing that the connection of the 500 MW East-West interconnector to the Irish transmission system should be at the Woodland transmission station which is located in south county Meath. This letter is published below:
Letter to EirGrid - East-West Interconnector Route Selection July 2007 CER07096a.pdf
The connection point choice comes on foot of detailed network studies undertaken by EirGrid and presented to the CER. A number of possible connection points were examined and Woodland was found to be the optimum point for connection.
The CER is currently considering how best to reserve transmission capacity for the interconnector, whose design and construction will be the subject of a tender competition, while taking account of the interests of other stakeholders. The CER is minded to issue EirGrid with a direction to reserve the required transmission capacity. This approach would be very similar to the approach adopted by the CER in the Gate 2 Direction on Renewable Generator Connection Offers of June 2006 regarding the relationship between renewable and conventional application offers. In the event EirGrid receives a connection application from a generator and concludes that the offer will be materially affected by the assumed 500 MW interconnector connection at Woodland, it would be required to consult with the CER. The CER, in turn, would reserve the right to issue a specific direction to deal with this contingency if it concluded that this is warranted by the wider public interest.
Progress toward the development of the East-West Interconnector - 2 Feburary 2007
Commission and EirGrid Moving Forward with East West Interconnection Project 2 February 2007 cer07016.pdf
Connection Study Report - 7 September 2007
The CER has published a report compiled by EirGrid on the selection of a connection point for the East-West Interconnector to the Irish transmission system. The report examines potential connection points and evaluates each one in turn. The report concludes that Woodland is the optimum connection point.
To view this report, please click on the link below:
East-West Interconnector - Connection Study Report CER07139.pdf
Approval to proceed - 29 March 2009
The CER has published a letter to EirGrid outlining approval for the East-West Interconnector Project to proceed.
In addition the CER has published a letter from the Department of Communications, Energy and Natural Resources regarding this approval.
To view these two letters please click on the link below:-
CER letter to Eirgrid on East West Approval cer09045
DCENR Letter to CER on East West Interconnector Approval
Development of a Business Case - 16 April 2009
The CER has published the Business Case for the East-West Interconnector Project (EWIC) as prepared by EirGrid. This has been published following the CER granting approval for the project to proceed on 27 March 2009 on foot of Government approval.
The business case represents an analysis of the likely costs of the project and the projected benefits it would bring to the electricity market. It was prepared by EirGrid following its engagement by the CER to develop the interconnector project following the request of the then Minister for Communication, Marine and Natural Resources in July 2006 to the CER to arrange the design of a competition for the interconnector project.
East West Interconnector-EirGrid Request for a Special Order - 20 July 2010
EirGrid has been granted three special orders in relation to the East West Interconnector. Click below to view EirGrid's application for a Special Order and the letter which grants the Special Order.
For more information about the Special Order granted to EirGrid, please click here.