Subsea French connection 'will end energy reliance on UK'
CONSTRUCTION of a €1bn subsea power line between Ireland and France is crucial to protecting the State's energy supply in the event of a hard Brexit, says EirGrid's boss.
National grid operator EirGrid plans to seek permission to build the Celtic Interconnector by 2019, with potential for up to half the cost to be met from the EU.
Ireland operates a single electricity market (SEM) with Northern Ireland, and the island is hugely reliant on imported fuels to power the economy.
Gas and electricity are imported through a series of interconnectors with the UK, but the Celtic link would be the first connecting Ireland directly with the European mainland.
EirGrid CEO Fintan Slye said that a worst-case scenario was that tariffs were imposed on electricity imports, adding that the subsea link would provide an alternative source of power.
"If tariffs were imposed on electricity, that would require a fairly fundamental rethink.
"The UK has huge levels of interconnection with mainland European countries and rely on them heavily.
"If you're looking at an acrimonious Brexit, where there's some kind of tit for tat and tariffs end up being imposed, it would be in the absence of a deal, more like a trade war, and I don't think that's going to happen."
There are currently two interconnectors between Ireland and the UK - the Moyle and the East West - and two more are planned.
They are the controversial North South Interconnector between Meath and Tyrone, and the Celtic link which EirGrid has worked on for the last number of years with its French counterpart, RTE (Réseau de transport d'électricité).
It would involve construction of a 540km cable under the sea, capable of importing and exporting 700MW of power - the equivalent use of 450,000 homes.
Costed at around €1bn, it is eligible for up to 50pc EU funding. Some €20m has been spent to date, with costs split equally between Ireland and France. EirGrid expects to seek regulatory approval next year, followed by an application for EU funding in 2019.
"It improves security of supply, increases competition because you have access to one of the biggest EU markets which will provide downward pressure (on prices) and we can export excess wind," Mr Slye said.
"Post the vote (on Brexit), it becomes strategically more important as it would be the only energy link between Ireland and the EU."
Both the Irish and British governments have indicated that the SEM, underpinned by bilateral legislation, will remain in place.
From next year, it will form part of the European Internal Energy Market, which allows for further integration with EU markets.
Brexit is unlikely to have an impact on the SEM, but if the UK or Northern Ireland decided not to transpose EU energy rules or make other changes which could be seen as giving generators here a competitive advantage, it could lead to problems.
"The question could arise over time if Northern Ireland decided not to comply with some evolution of EU policy in a particular area, for example environmental regulations, where they potentially extended the life of coal or oil-fired power plants, where under EU legislation there is a directive looking for them to close," Mr Slye said.
"It's a risk that if you look 10 years post Brexit, has policy diverged to a point where it's not a level playing field?
"But in any event, the market has always existed across two jurisdictions with different rules.
"Over the 10 years plus that the SEM has been there, neither government has done anything which has disturbed it so there's no reason to believe that the day Brexit happens that one will do it."
Separately, Ireland may be forced to seek an exemption from EU rules which oblige member states to hold the equivalent of 90 days stock of oil, or some 1.6 million tonnes, to cover any interruption in supply.
The oil stocks must be maintained within the EU at all times, meaning that when the UK leaves after Brexit, the stocks held there will not be counted.
Some 20pc of total stocks are held in the UK, with 57pc in Ireland and the remainder in Denmark, Sweden and Spain.
Energy Minister Denis Naughten has said his "strong preference" is that back-up supplies remain in the UK and are counted as part of the 90-day emergency stocks obligation.