EU to back Irish power projects post-Brexit

The European Union and European Investment Bank are set to invest in two energy projects, that have taken on increasing significance for Ireland’s energy security, post Brexit.

Ireland imports 60 per cent of its gas from the UK but that standard is now under threat as Ireland cannot negotiate a separate bilateral trade agreement with its bigger neighbour after Britain officially exits.
Celtic interconnector
As a result an injection of funding is expected to bolster an undersea power link between France and southeast Ireland and a liquefied natural gas (LNG) import terminal in the mid-west, on the Shannon estuary, will also receive investment.

The Irish government has already thrown its weight behind EirGrid and RTE’s Ireland-France (Celtic Interconnector) 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 told Reuters. “We will be available and will assist,” he said, adding that the projects may seek funding from Ireland’s state strategic investment fund.

Meanwhile 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 told Reuters. “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 each expected to cost around EUR1bn each to build so securing additional funding sources would provide a huge boost.

The Celtic Interconnector, set to run from 2025, last month received a EUR4m 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-MW gas-fired power plant at the site.

Ireland energy dependence on the UK will be one focus of intense negotiations for the country in a post-Brexit scenario. Ireland wants to maintain its trade ties but is under pressure to align with Brussels. There is also concern that Brexit could jeopardise plans to join the Irish and Northern Irish electricity markets by the end of this year, a multi-year project to create a unified Irish electricity market in line with EU legislation.

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