Eirgrid

, the State-owned operator of the national power grid, says cheaper power imported through the new east-west interconnector (Ewic) between Ireland and Britain has reduced the wholesale cost of electricity by

9 per cent.

It said a €1 billion proposed power-link, which would run under the sea between Ireland and France, could reduce tariffs by a similar margin, if the project gets the go ahead.

Eirgrid and its French counterpart, RTÉ, have signed a memorandum of understanding to develop the link on a 50/50 joint venture basis.

Survey boat
They have commissioned a boat to survey potential undersea routes over the next two summers and Fintan Slye, Eirgrid's chief executive, said it is possible the project could go to tender in 2016. Both countries' governments and the energy regulator will also take part in the decision-making process.

Eirgrid, which yesterday released its annual results, said its €500 million share of the proposed project would probably require its entry onto corporate bond markets for the first time, alongside Bord Gáis and ESB.

Borrowings
The company is already relatively heavily leveraged with borrowings of more than €400 million relating to Ewic.

The French interconnector would more than double the size of Eirgrid, in terms of its asset base.

Eirgrid yesterday announced revenues of €622 million, up from €542 million, with most of the increase accounted for by use of the new interconnector. Profits before tax surged from €21 million to €61 million, but the company said that €34 million was an over-run on fixed charges for the Ewic and would be returned to customers. Underlying profits, stripping out the cost of exceptional items, remained constant at about €18 million.

The company, which has been the focus of protests around the country over the siting of pylons for three major upgrades to the grid, said it is interviewing candidates for a senior public affairs role, partly to help it manage opposition to its plans.