Wednesday 29 May 2013
Guernsey Electricity (GEL) has entered into a ground-breaking agreement with Jersey Electricity (JEC) to develop cable connectivity between the islands and with France.
The agreement was confirmed in a statement in today's States meeting by the Treasury and Resources Minister, Deputy Gavin St Pier. In his statement he said that the agreement "will deliver significant benefits for Guernsey in terms of the security and affordability of electricity supplies within a relatively short time frame."
GEL signed the agreement within the last week to participate in the delivery and evaluation of three major new cable initiatives:
- Normandie 3 - installation of a new Jersey-France cable in 2014
- Normandie 1 - overlay of the failed EDF1 Jersey-France cable by 2016, subject to planning permission from the French authorities
- G/J 2 - full scoping, assessment and evaluation of a project to install an additional Guernsey-Jersey cable. A decision will be taken on this in due course, and if the go-ahead is given this cable could also be installed in 2016
Speaking in the States, Deputy St Pier said that the projects would deliver a number of strategic benefits to Guernsey that are consistent with the Energy Policy in the short and medium term - more affordable energy, more secure energy supplies, and an infrastructure better geared to delivering decarbonisation.
Delivery of the Normandie 1 and Normandie 3 cables will lead to an almost four-fold increase in the level of electricity imported from Jersey - from 16MW to 60MW. This will meet 90 per cent of Guernsey's electricity demand, greatly reducing the reliance on higher-cost energy produced on-island. This in turn will lead to a reduction in production costs, providing an opportunity to make reductions in electricity tariffs; to a more secure energy supply; and to a reduction in the environmental problems associated with on-island generation.
GEL is also continuing to evaluate the possibility of a direct Guernsey-France cable, the timescale of which would be 8-10 years.
GEL will be contributing just under £30 million towards the capital cost of the Normandie 1 and Normandie 3 cables. This amount is based on the proportion of the import capacity to which GEL is contractually entitled under the agreement. This capital expenditure will be financed through borrowing, either from the States General Investment Pool or external third parties.
Deputy Gavin St Pier, Minister for Treasury and Resources, said:
"This agreement between Guernsey Electricity and Jersey Electricity is a significant step forward for Guernsey, and will ultimately benefit every houshold and business in Guernsey. That is why the Treasury and Resources Board believes it is appropriate to facilitate this through the authorisation of the necessary borrowing by GEL."
"These developments will be delivered under the umbrella of the Channel Islands Electricity Grid, and it is further evidence of how Guernsey and Jersey are at their strongest in dealing with the challenges that they face when working together."
Deputy Peter Harwood, Chief Minister said:
"The Policy Council is committed to maintaining the safety, security, affordability and sustainability of the Guernsey's energy supply. Whilst electricity is not the only energy supply used in Guernsey, all islanders benefit both directly and indirectly from the Island having secure and affordable electricity supplies."
"With that in mind, the Policy Council fully supports the proposals set out in the Minister for Treasury and Resources' statement. We welcome the fact that the proposals are fully aligned with the Energy Resource Plan, and that as well as tackling some of the challenges we face in the short and medium-term, they also provide a potential roadmap for the longer-term electricity importation strategy."
Deputy Kevin Stewart, Minister for Commerce and Employment said:
"Our energy infrastructure is vital to the well-being of our economy. Our businesses, large and small, rely upon it. Today's announcement shows that our infrastructure is being developed to ensure greater security and affordability. That is good for business.
"The improved cable links will also create a greater capacity for us to export locally produced renewable energy efficiently in the future, an opportunity for our renewable energy sector in Guernsey to grab with both hands."
Alan Bates, Managing Director of GEL said:
"The investment in greater import capacity and security of import supply is a fundamental part of the Guernsey Electricity strategic plan. As a business we are focused on putting in place a sustainable and affordable electricity supply to the island which caters for our future aspirations of decarbonising electricity generation. Imported power through the new cable infrastructure will come from either low carbon or renewable sources. Additionally, these investments facilitate the implementation of renewables in the future by creating a transmission infrastructure which will allow export to Europe of locally generated renewable energy.
"Whilst we are planning for the future we must not forget affordability today. The ability to have access to the European electricity market allows us to manage tariffs and give greater stability and predictability to our customers. Additional import security will also allow us to review our on-island generation fleet which will always be available to respond if required."
Mrs Jill Allen
Tel: +44 (0)1481 717 000