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UK, Ireland seal renewable electricity trade deal

The UK and the Republic of Ireland have signed a key agreement that will enable the two countries to trade renewable power with each other by 2020.

Following the signing of a Memorandum of Understanding (MoU) in Dublin, the two governments plan to carry out detailed analysis of how Irish renewable energy resources, onshore and offshore, might be developed to the mutual benefit of Ireland and the United Kingdom. And if the analysis turns up positive results, a new firm inter-governmental agreement would follow in 2014.

The agreement could see 3GW of new wind projects constructed on Irish soil, with all projects selected via competitive tender.

Ireland, which has led the way in wind energy generation, hopes to be able to offload some of its surplus power to the energy-hungry UK market, while the UK hopes that Irish-generated power can help it meet its renewable energy targets. “Ireland has the potential to generate far more wind energy than we could consume domestically,” said Pat Rabbitte.

“The opportunity to export this green power presents an opportunity for employment growth and export earnings which we must seize if we can.”

“We will work closely with the UK government so we are in a position to move towards a formal agreement on energy trading,” he added. “We will tease out the very complex engineering and market issues so that, subject to their successful resolution and a decision by UK and Irish ministers to proceed, in a year’s time, we will be in a position to make an intergovernmental agreement providing a formal basis for energy trading.”

The two countries plan to form close alliance on energy issues, with the aim of closely integrate their two markets.
Renewable electricity generated in the UK could also be sold to Irish consumers, and vice versa, as part of efforts to balance the grids in both countries as more intermittent wind power comes online.

UK Secretary of State for energy and climate change, Ed Davey, said: “Trading power with Ireland could increase the amount of green power in our energy mix and potentially bring down costs for UK consumers.”

“Making the most of the natural renewable resource available around our islands could benefit the economies of both countries,” he added. “The MoU marks the continuation of close working between our governments on the potential for energy trading.”

Anglo-Irish firm Element Power, which is hoping to build the Irish capacity that will export power to the UK, welcomed the news. “This agreement shows the UK and Irish governments’ strong commitment to projects which can provide energy security, low carbon electricity and economic growth,” said Mike O’Neill, chief operating officer of Element Power UK and Ireland.

The company plans to build 3GW of capacity, named Greenwire, by 2018 at a cost of £6.5 billion, and has been awarded a firm grid connection for the capacity by the UK’s National Grid via two connection points in Wales, and has also secured land-deals with natural resource company Collite for possible locations for the capacity.

Further reading - Is 2013 the UK's year of reckoning?

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Energy infrastructure  •  Policy, investment and markets  •  Wind power

 

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