A detailed study into how an offshore electricity grid between Scotland, Northern Ireland and Ireland could be introduced has now been commissioned after being awarded European funding.

The second part of the Irish-Scottish Links on Energy Study (ISLES) has now been given £1 million to examine how an offshore grid could be established by breaking down the complex financial, legal and regulatory issues that can affect cross-border energy projects.

Ministers from the three administrations, attending the British Irish Council summit in L'Derry in Northern Ireland, welcomed the development and committed to work together to examine how such a project could be brought to fruition.

The ISLES announcement comes days after SSE confirmed it would respond to a joint Scottish and UK government study into the potential for renewable energy on Scotland's islands by submitting a needs case to Ofgem for a £780 million subsea cable link to connect the Western Isles to the national grid.

Speaking before the BIC meeting, First Minister Alex Salmond said the new ISLES European project funding, coupled with SSE's progress on the Western Isles connectivity cable, offered "hugely encouraging progress" on the infrastructure necessary to allow the renewable energy industry in all three markets to reach its full potential.

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He said: "The waters around these islands have some of the most abundant offshore energy resources anywhere in the world, but in order to harness this vast potential it is vital that we have the infrastructure in place to transfer the energy that is generated to where it is needed.

"That is why the ISLES project is so important. This innovative, cross-border study is examining how we can establish an offshore electricity grid to make this transference of energy easier, supporting our flourishing renewables industry by powering the nation and allowing the surplus energy it generates to be exported to other markets.

"The first part of ISLES demonstrated that an offshore grid of this type was both technically feasible and economically viable. The announcement, that ISLES has been awarded £1 million in European funding to identify and, where possible, break down the barriers to cross-border energy trading, is another extremely welcome development and a fantastic example of how forums such as the British Irish Council bring administrations together to tackle issues of mutual interest in a positive, collaborative fashion.

"The timing of the ISLES funding is even more apt, coming as it does just days after SSE confirmed that the potential for renewable energy output on Scotland’s islands had led it to submit a needs case to Ofgem for its £780 million subsea cable link to the Western Isles.

"Taken together, these announcements offer hugely encouraging progress on the infrastructure that we need to secure to ensure the burgeoning renewables industry – in markets across these islands – is allowed to reach its full potential."

Speaking from Ireland, Irish Minister for Communications, Energy and Natural Resources Pat Rabbitte said: "I support the establishment of the Energy Study ISLES II. There is huge potential for capturing wind, wave and tidal energy and this cross-jurisdictional offshore integrated network is economically viable and competitive compared with developer-led stand-alone connected projects. It can potentially deliver a range of wider economic, environmental and market related benefits to both Ireland and the UK."

(CD)