The Moyle Interconnector consists of two 250 MW high-voltage direct current cables that can transfer electricity between the two grids in either direction. The Interconnector was completed in December 2000.
The agency said that one of the faults, which resulted in the outage of the south cable, has now been rectified and the 250 MW cable was put back into service on 18 January 2012. However, revenues from capacity auctions are likely to be lower than expected because of the lower availability of the Interconnector and the changing competitive landscape.
“Today’s decision to initiate a review for downgrade of the underlying rating follows the poor operational performance of Moyle as a result of two serious technical failures, which caused a prolonged period of full unavailability and considerable repair costs,” said Declan O’Brien, an analyst in Moody’s Infrastructure Finance Group. “Of particular concern is that further outages may cause the Issuer to undertake repairs, which could lead to a deterioration of its liquidity position,” he added.
Moody’s also noted that Moyle would face competition from East-West Interconnector, an alternative link between Ireland and Great Britain, scheduled to enter into operation in October 2012.
However, the agency said that Moyle had sufficient cash reserves and would be likely to receive insurance payments to cover the cost of the outages.