The Celtic Interconnector is ‘good news’ for investment in renewables

Out-Law News | 06 Dec 2022 | 10:05 am | 2 min. read

The Celtic Interconnector – a subsea electrical cable ensuring power transmission in both directions between Ireland and France – will “make the economics of investing in renewables more favourable”, according to one expert.

The project, which is at the centre of plans to secure Ireland's energy needs in the decades ahead, was given the go-ahead in Paris last month, where taoiseach Micheál Martin, and French minister Agnès Pannier-Runacher signed technical and financing agreements. The Celtic Interconnector will be co-developed by EirGrid and Réseau de Transport d’ Électricité (RTE) and is expected to be operational by 2026.

John Scanlon of Pinsent Masons said: “The ability to export electricity to France considerably reduces the risk of electricity over-supply and the challenges around curtailment of renewable generators. This will become increasingly relevant as the percentage of onshore wind, solar and to a greater extend offshore wind in the Irish electricity mix increases. This will ultimately make the economics of investing in renewables more favourable, which is good news for generators, investors, funders, and ultimately the Irish consumer.”

The 575km subsea cable will link La Martyre in Brittany to Knockraha in Cork, delivering a high voltage direct current underground circuit with a capacity of 700 MW – enough electricity to power around 450,000 households. The interconnector is an EU Project of Common Interest (PCI), a key cross border infrastructure project to link the energy systems of EU countries, and will be partly funded by the EU. In 2019, the project was awarded a Connecting Europe Facility (CEF) grant worth €530 million to support construction works – one of the biggest CEF grants for works in history. Completed project costs are expected to reach more than €1.6 billion, up from 2019 estimates of €930mn.

Energy law specialist Scanlon said: “The ability to import electricity directly from France reduces our exposure to electricity price peaks during periods where renewables are not generating. This facilitates renewables becoming the primary energy source on the national grid. The project is politically significant too as it establishes a direct link between Irish and French networks, strengthening electrical and political solidarity between the two countries, and enabling Ireland to access the integrated European electricity system. The project will end Ireland’s recent isolation from the EU’s electricity system following Brexit and will have a significant impact on the security of electricity supply for Ireland.”

The project is also intended to strengthen security of power supply between France and Ireland, ensuring mutual support in the event of unforeseen circumstances like severe weather, technical incidents, peak consumption and geopolitical challenges. It could lead to the development of an integrated energy system for the wider European energy market, allowing electricity to move around more efficiently to regions that need it. There are similar interconnectors between Ireland and Wales; and between Northern Ireland and Scotland.

Catherine Burns, energy lawyer at Pinsent Masons said: “The Celtic Interconnector project demonstrates Ireland’s commitment to energy connectivity, security and ultimately export growth. With so many new renewable projects in the pipeline, the Celtic Interconnector project offers the Irish energy market the opportunity to export electricity directly into Europe, providing a physical route to market for the export of surplus electricity.”

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