The 2009 Renewable Energy Directive (Articles 6-11 of Directive 2009/28/EC) provides mechanisms whereby renewable electricity can be traded between countries so that renewable power produced in one country may be counted towards the legally binding renewable target in another. This can be done through a number of mechanisms including statistical transfer and joint projects. The UK Department of Energy has recently concluded a public call for evidence around the issues involved in opening up their market to allow for renewable electricity imports.
My recent meeting with UK Energy Minister Charles Hendry covered a number of issues, one of which was the possibility of renewable energy trading between the jurisdictions in the context of the framework provided by the Renewable Energy Directive. Exploring renewable trade was already agreed at a high level at the 2011 June British Irish Council summit and had been progressed in the interim at the British Irish Council working group level.
Last month at my meeting with Minister Hendry, both sides agreed to work towards concluding a Memorandum of Understanding by the end of the year which will be an important step in relation to the proposition of cross border renewable trade between the two jurisdictions.
Increased interconnection between the two islands offers Irish developers the prospect of being able to access a much larger electricity market. The electricity market in GB is around ten times the scale of the electricity market in Ireland. In the short term there are opportunities for on and offshore wind and biomass projects, but in the medium to longer term as technologies mature and become commercially deployable, there will also be opportunities for wave and tidal developers.
Any project development that takes place for export has to occur under the auspices of a legal inter-governmental agreement with the UK under Directive 2009/28/EC. There are currently a number of project developers that have expressed interest in renewable export. The manner in which projects falling under the Inter-Governmental agreement would be selected has not yet been determined.
Officials from both sides are examining a range of issues around the electricity market, regulatory and technical grid areas to underpin the creation of cross jurisdictional renewable electricity trade. I expect to meet Minister Hendry again in the autumn to review progress on the official level discussions and to ensure momentum towards seeking agreement on renewable trading. We will work to develop the terms of such an agreement in a way which ensures a mutually beneficial arrangement with the UK and to ensure tangible economic benefits for Ireland.
Separate to the question of trade in renewable electricity, under the third liberalisation package — a set of Directives and Regulations aimed at advancing the goal of a common electricity and gas market in Europe — Ireland is required to move towards a target market for electricity within the EU by 2016. Ireland is liaising closely with the UK and EU on the regional market and changes to the structure of the Single Electricity (SEM) are being assessed and consulted on by the 2 regulators North and South in conjunction with the two Departments.
