Ea Energy Analyses advises the Irish Government on its Hybrid Interconnector policy design

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As Ireland transitions away from a developer-led towards a plan-led model for Offshore Renewable Energy (ORE), in which the state obtains a pivotal role, a series of policy and regulatory reforms has become necessary.  With this policy reform as background, Ireland’s Department of the Environment, Climate and Communications (DECC) obtained assistance from the EU Commission (DG REFORM) to acquire tailor-made expertise to design and implement reforms that would help the country realize its vast offshore wind potential, which is governed by the Maritime Area Planning Act (MAP).

Ea Energy Analyses was responsible for providing recommendations to set up the appropriate policy framework for hybrid interconnections, which are electricity infrastructure that serves the dual purpose of transporting electricity to demand centres and interconnecting adjacent bidding zones. Hybrids – which are also known as Multi-Purpose Interconnectors (MPIs) in other jurisdictions –  are considered as an important first step in the process of establishing an offshore meshed grid.

Recommendations from the final report

The final report was recently published, and can be found here. The following are the main recommendations from the report:

  • With respect to transmission planning, it is recommended to develop an offshore transmission strategy, which includes a holistic offshore-onshore network design approach and becomes part of Ireland’s national grid Development Plans (NDP). It was also recommended to open for the possibility of anticipatory investments, which allow for future “hybridization”, if evidence in favour of hybrid interconnections is clear.
  • With respect to international cooperation, it was recommended to proactively establish political and technical cooperation between Ireland and relevant countries through instruments such as Memoranda of understanding (MoU), letters of intent (LI), hybrid asset network support agreements (HANSAs) .
  • With respect to the financing of transmission assets, it was recommended to have openness to the cap-and-floor regime for Ireland’s part of a hybrid interconnector project.
  • With respect to the market design, it was recommended to progress with a radial connection approach until 2030, but to establish offshore bidding zones (OBZs) after 2030, while accompanying the introduction of these with appropriate and non-distorting de-risking measures, such as CfDs, PPAs.

Three supplementary recommendations were also put forward:

  1. Promoting ORE development in commercial terms – as much as possible.
  2. Being open to the cap-and-floor regime for Ireland’s part of a hybrid interconnector project, due to compatibility considerations.
  3. Adopting a proactive decision on the introduction of OBZs as part of the transition to the plan-led regime.

The project obtained input from the comparison of international best practices from the UK, Netherlands, and Denmark, which were collected through interviews with regulators, transmission system operators and developers and detailed literature reviews. Several workshops with government, industry and other stakeholder groups from Ireland were also held.

According to the Irish government, Ea’s contribution on the hybrid policy framework “seeks to inform Member State colleagues of its findings and to aid ongoing EU policy objects for Hybrid Interconnections. At a national level it seeks to inform and set relevant actions within the upcoming Offshore Transmission Strategy for Ireland”.

For more information, contact Luis Boscán.