Love thy neighbour: European power interconnections

If you look in certain corners of European power markets, you’ll find a growing, grumbling sentiment that interconnection capacity with neighbouring countries can be more of a hindrance than a help. Connecting two markets is not without risk for both parties, and sceptics often cite market instability and volatility as reasons to slow down cable buildout. 

But a recent example in Ireland, a market with one of the lowest interconnection capacities in Europe, demonstrates the outstanding effects that new cross-border connections can have. Greenlink connects the Irish Single Electricity Market (SEM), which comprises the Irish Republic and Northern Ireland, with Britain. It came online in late January, adding more than 500 MW of capacity. By March, it had become the most used cross-border cable in the market and was sold off by its owner for more than EUR 1bn. This connection has had an immediate positive impact on Ireland, supporting the country’s progress towards its green energy targets in several key ways. 

How interconnectors provide extra capacity

At a basic level, the additional 500 MW of connection capacity with the GB market enables greater volumes of power to flow into Ireland from renewable sources in Britain or via Britain’s interconnectors with mainland Europe. This had the effect of displacing fossil fuel-fired generation in the Irish stack. Irish demand increased by around 3% from Q1 2024 to Q1 2025, while wind output decreased by a similar proportion. However, fossil fuel power generation dropped over the same period. This was largely due to power imports coming from Britain as cheaper renewable generation pushed gas and coal-fired power stations out of the merit order. 

But the Greenlink impact stretches beyond market fundamentals. Because it has the lowest loss factor of the three cables connecting Ireland to Britain, it makes the most economic sense to dispatch this cable first.

Previously, the Moyle interconnector had priority dispatch, meaning that when Ireland’s SEM market needed power from Britain, it was routed through Northern Ireland, where Moyle connects. However, the Republic of Ireland has significantly higher demand than Northern Ireland. Transferring power – including wind generation and Moyle imports – from the North to the Republic is extremely challenging due to limited transmission capacity between the two jurisdictions.

Having Greenlink as the priority interconnector has alleviated some of the pressure on the cable connecting the North with the Republic. In Q1 2024, generation in Northern Ireland had to be curtailed almost 50% of the time in the balancing mechanism due to this transmission bottleneck. In Q1 2025, that number dropped to around 16%. 

How interconnectors reduce curtailment costs

Historically, northern wind assets would often be curtailed to make way for power imports from Moyle to flow south. Greenlink has given more headroom for northern wind generation to reach the system as it has reduced the volumes coming through Moyle. 

The result is that wind curtailment in Northern Ireland was almost 30% lower in Q1 2025 than in Q1 2024. 

A new cable is under construction to ease the main bottleneck between Northern Ireland and the Republic. Wind developers and operators have said the cable cannot come soon enough, despite the recent support from Greenlink. 

Greenlink’s notable impact on wind curtailment, even before the full transmission infrastructure upgrades are completed, highlights the numerous benefits of connecting neighbouring markets. Investment in cables like this rarely goes to waste. 

The future for European interconnectors

When the Irish market enters the flow-based market coupling system used on the European continent, internal constraints will be more significant. Under this system, every cable in Europe’s network is considered to determine the most efficient power flows within and between markets. This approach is crucial to maximising the value of infrastructure, as a single strategically placed cable can significantly alter the overall power flow.  

We’ve seen this principle in action with Greenlink. Will the rest of Europe take note and seek to boost its neighbourly ties?

This article originally appeared as a column on montelnews.com