Major Irish energy projects funded by EU in preparation for Brexit
The European Union (EU) has announced it will fund two big Irish energy projects that are designed to reduce that country’s dependence on Britain, prior to the latter’s upcoming exit from the Union.
The EU is currently stepping up efforts to support the Republic of Ireland, which is likely to be the country most affected by Brexit that still remains a member.
Brexit has cast doubt over the security of the gas Ireland imports from Britain, which supplies 60 per cent of its needs. As an EU member, Ireland is not allowed to negotiate a bilateral trade agreement.
The Irish government has thrown its weight behind two new energy import projects: EirGrid and RTE’s Ireland-France electricity link and a liquefied natural gas (LNG) import terminal proposed by a private investment vehicle that took over the project from US energy giant Hess.
“Because all of our electricity and gas interconnections are with Britain, it would be irresponsible of us not to explore all other options,” Ireland’s Energy Minister Denis Naughten said.
“We will be available and will assist,” he said, adding that the projects may seek funding from Ireland’s state strategic investment fund.
The European Investment Bank (EIB), which invested some €800m (£691m) in Ireland last year, said it would be interested in lending money to support the Ireland-France electricity link, also known as the Celtic Interconnector.
The EIB has previously provided loans to European LNG import projects.
“The EIB is very conscious that Ireland is uniquely exposed to the economic consequences of Brexit,” EIB Vice President Andrew McDowell said.
“The need to show tangible European support for Ireland is becoming more pressing and the EIB is part of that.”
The two Irish energy import projects are expected to each cost around €1bn to build, so securing additional funding sources would provide a huge boost.
EirGrid said it was focusing on evaluating the cost of the Celtic Interconnector and would concentrate on funding arrangements later.
A spokesman for the Shannon LNG project said the company was evaluating its funding options.
The Celtic Interconnector, set to run from the southern Irish coast to Brittany in France from 2025, last month received a €4m funding boost from the EU, showing Ireland’s energy security is also at the top of the European Commission’s agenda.
The Shannon LNG project will be able to pump a maximum of 28.3 million cubic metres of gas per day into the Irish grid, equivalent to more than twice Ireland’s annual gas demand. It will be the closest European port of call for a glut of US LNG exports set to start flowing in coming years.
The developer is also proposing to build Ireland’s first gas storage tanks and a 500-megawatt power plant at the site.
Plans for the LNG terminal, shortlisted for EU funding, have lain idle in recent years because global LNG oversupply and Irish regulations on costs for connecting the facility to the network have hampered the project’s economics.
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