A plan to run a €200 million electricity interconnector between Wales and Ireland moves a step closer to reality this Friday when a licence application for the infrastructure is lodged with the British regulator Ofgem.
The interconnector will allow UK electricity companies to sell their surplus power, often cheaper than Irish electricity, to Irish customers, both domestic and corporate. In theory Irish generators could export their power to Britain via the same facility.
The licence application will be made by Imera Power, which contains several executives with broad experience of the energy markets. The sub-sea electricity interconnector will provide 500 megawatts of power to Ireland.
The company is aiming to have the interconnector ready by early 2009. The €200 million cost will be met by capital from specialised infrastructure funds, EU finance and debt from the bond markets.
Imera expects the installation of the interconnector, which is effectively two cables running along the sea bed, to begin in 2007. In a letter sent this week to the Minister for Communications, Noel Dempsey, Imera said: "The interconnector is strategically important for Ireland, but it is equally important for north Wales in ensuring continued security of supply in the area."
In theory nuclear-based power could be exported into Ireland from the UK, but Imera has yet to decide which companies will be allow utilise the facility. The ESB may also use the facility to bring in power when some of its stations experience breakdowns.
Funding for the project is considerably advanced, but will not be completed until November. A UK company Sowerbys has been appointed to source equity investors.
There are also plans to list on the AIM market in London. An information memorandum has been circulated aimed at getting a sponsoring broker.
The company believes it can secure some EU funding for the project. It points out that the Moyle Interconnector in Northern Ireland qualified for 35 per cent EU funding.
The cables are due to run between north Wales and most likely Co Wicklow, possibly Arklow. The company's next step after making the licence application is to complete a marine survey which involves an examination of the sea bed.
The company believes there is a strong demand from electricity companies to export power into the Irish market. Several major energy firms have mothballed their stations in the UK because there is overcapacity there. UK power, because of the economies of scale and the presence of nuclear power, tends to be cheaper than Irish originating electricity.
