Greenlink is a proposed HVDC (high-voltage direct current) interconnector between Wexford on the south-east coast of Ireland and Pembroke on the south-west coast of Wales.
Ireland’s Commission for the Regulation of Utilities (CRU) noted it could enable greater integration of renewable energy, boost security of supply and lower energy prices.
It will now determine the best approach to a ‘cap and floor’ mechanism to support the Greenlink interconnector’s developer in the first half of 2019.
In a ‘cap and floor’ model, "an interconnector’s sales revenues that are below the floor are topped up by network tariffs, and its sales revenues above the cap are returned to the end consumer", the CRU explained.
It also noted that Greenlink could enable more renewable energy to be added to the grid because surplus output can be safely exported. This would also reduce curtailment, the CRU added.
Mike O’Neill, chairman of project developer Greenlink Interconnector, said the CRU’s decision would enable it to start marine surveys and tender construction contracts.
Construction on the €400 million transmission link is due to start in 2020, the developer stated.
Simon Ludlam, Greenlink’s project director, added the developer hoped to complete the interconnector in 2023.
Greenlink had previously been developed by Irish company Element Power. Statkraft acquired Element Power's UK and Irish wind business in October 2018, but the deal did not include the Greenlink project.