National Grid chief calls for more interconnectors to UK

Energy prices for British consumers would fall by £1bn a year if electricity interconnectors between continental Europe and the UK were doubled by 2020, according to the operator of the UK's gas and electricity networks.

"The £1bn price saving could be achieved for an investment of £3bn," said Steve Holliday, chief executive of National Grid.

Interconnectors are transmission cables which allow electricity to flow between countries, and can be used to import or export power.

The UK has four so far, linking the British mainland to France, Ireland, the Netherlands and Northern Ireland. These total 4,000 megawatts, about 5 per cent of existing electricity generation capacity. Importing cheaper power reduces the UK's wholesale prices and would benefit consumers if lower prices are passed on by retailers.

National Grid already jointly operates two of these cables, to France and the Netherlands. The power company is also working with government backing on what would be the world's longest interconnector, to Norway, aimed at tapping the country's surplus of hydroelectric power. Other key projects are a 1,000MW link to Belgium and an additional 1,000MW supply line to France - an established swing supplier of energy to the UK market.

Discussions are also talking place over plans for a Denmark to UK link, Mr Holliday said.

The National Grid chief said increasing interconnection was a key weapon in the battle to avoid a looming "energy crunch", as the UK's generating capacity suffers from the retirement of ageing coal plants and nuclear reactors.

<

The tabular content relating to this article is not available to view. Apologies in advance for the inconvenience caused.

He said there was evidence of an increased commitment to interconnection by policy makers at the EU summit last month.

"All the noise was about the selection of Juncker," he said. "But real progress on energy was being made in the background."

From 2008 to 2012 the UK imported nearly four times more electricity than it exported, with imports eight times greater than exports in 2012, according to the government's digest of UK energy statistics.

"Prices will always be lower in continental Europe, for structural reasons" he said. "This wouldn't be so much about increasing security of supply - it's about lowering the cost of energy."

Mr Holliday said politicians, regulators and green lobby groups in the UK supported the push towards greater interconnection. But he believed the EU was still far away from a single market in energy.

"It's difficult to imagine a single European regulator," he said.

© The Financial Times Limited 2014. All rights reserved.
FT and Financial Times are trademarks of the Financial Times Ltd.
Not to be redistributed, copied or modified in any way.
Euro2day.gr is solely responsible for providing this translation and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation