NATIONAL ENERGY suppliers will take part in a sealed-bid auction for capacity on the first private electricity interconnector between the Republic and Britain in September
Imera, the company that owns the interconnector, reported "astounding" interest at an initial bidders' conference.
The auction paves the way for an international energy supplier to enter the Irish market and bring in price competition when the interconnector is up and running in 2011.
Representatives from international energy companies including Gazprom, E.On, Centrica, StatoilHydro, British Energy, Scottish Power, Gaz de France attended an oversubscribed bidders' conference last month in London.
Irish wind power companies, which successfully bid for capacity, will be able to export energy on the interconnector during off-peak periods.
Imera chief executive Rory O'Neill said the company was now in "open season" until September when it will announce the results of the auction.
The company, which is building a €200 million east-west interconnector from Arklow, Co Wicklow, to Pentir station in North Wales as part of wider plans to construct an offshore European "supergrid", intends to split the 350 megawatt (MW) interconnector between at least two energy companies.
It is selling contracts for up to a maximum of 70 per cent of the interconnector over periods of between 10 and 25 years.
Once it is completed, the interconnector will add around 7 per cent extra energy capacity to the Irish grid.
A separate 500MW east-west interconnector between Co Meath and Deeside in Wales is being built by EirGrid, the State body that runs Ireland's national grid.
Both the EirGrid interconnector and the Imera project will help improve Ireland's future security of energy supply.
Mr O'Neill said the private interconnector would also result in a reduction of wholesale electricity prices.
Imera, which formed as the result of a merger between Dublin-based Imera Power and the Norwegian-listed firm Oceanteam, has applied to the Commission for Energy Regulation (CER) and the British energy regulator Ofgem for a 25-year exemption from regulation based on its status as a privately funded enterprise.
A regulatory-free environment is likely to prove one of the attractions for international energy giants, as will Ireland's position as an untapped energy market that will be linked to Britain.
The strong interest in the bidding process suggests that there is no shortage of cash in the energy sector. "The type of investors we see aren't affected by the credit crunch, that's for sure," Mr O'Neill said.
Imera will hold a €100 million fundraising exercise in September, but its east-west interconnector is being financed by shareholders.
The company holds licences to build five interconnectors across Europe and is planning to build eight altogether. The interconnectors will lay the foundation for a so-called supergrid that will also be able to tap into offshore wind farms.
