The Irish regulator Commission for Regulation of Utilities has started a detailed assessment of Element Power's proposed 500MW Greenlink interconnector between the UK and Ireland.
CRU intends to provide an initial assessment decision in September if the project is judged likely to be in the public interest. A final decision would then follow next year.
The regulator is also considering a new cap-and-floor support mechanism for the project, Element Power said.
Element Power chief executive Mike O'Neill said: “With this announcement, the regulator has signalled that it is open to considering an innovative type of regulatory regime to support interconnection in Ireland, one that will provide better protection for electricity consumers and a clear roadmap for further private investment in our Greenlink project.”
The 170km interconnector would connect Ireland from Great Island off County Wexford to the UK at Pembroke Dock in Wales.