News & insights
Date: December 2018 | Client: Commission for Regulation of Utilities (CRU) | Sector: Energy | Energy infrastructure | Energy markets | Expertise: Cost benefit analysis & impact assessment
Cost-benefit analysis of new interconnectors in Ireland
Our cost-benefit analysis of the Celtic and Greenlink electricity interconnectors for the CRU demonstrated that increasing the interconnection of Ireland to other markets is expensive but the benefits are likely to outweigh the costs.
How we did it
The challenge for this project was to capture how the benefits of interconnection depend on other developments in the Irish and connecting energy systems. We used an energy market model to simulate future scenarios. We then compared the costs and benefits of the interconnectors for the Irish energy system and for consumers.
What we found
We found that the highest social benefits associated with new interconnectors were observed in scenarios where ambitious targets are assumed with regards to renewable generation deployment and decarbonisation. This is because the additional interconnector capacity would enable more renewable generation to be exported, instead of being curtailed. In scenarios with less ambitious decarbonisation targets, the interconnectors could result in marginally positive or even negative benefits.
We are now supporting the CRU in the next stages of the project where we will seek to determine the regulatory framework under which these two interconnectors would operate.
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