LONDON (Reuters) - The business case for building power links between Britain and its European neighbors remains good despite Brexit, National Grid’s director of business development told a parliamentary committee on Wednesday.
Britain plans new interconnectors with France, Denmark, Belgium and Norway to add up to 14 gigawatts (GW) of capacity to the 4 GW provided by the four interconnectors it already has with Europe.
Britain’s decision to leave the European Union has raised concerns that the country could lose its say in EU regulation of networks and power trading, potentially upsetting plans for more power links with the continent.
Prime Minister Teresa May’s announcement last week that Britain will leave the EU single market gave no indication of implications for energy markets, but the prospect of a so-called hard Brexit raises the possibility that Britain could leave the bloc’s internal energy market (IEM), which coordinates access to energy across the EU.
“The conditions for developing interconnectors remains good,” Ian Graves, director of business development at National Grid, told a hearing of the Business, Energy and Industrial Strategy Committee.
“Our interconnectors are built as commercial entities. We have an incentive to ensure the links are built and are flexible and ready to use at the right time. That should continue regardless of the Brexit situation.”
National Grid and French grid operator RTE plan to develop a 1 GW interconnector between the two countries.
French energy markets regulator CRE approved the project in a document published on its website on Wednesday, after delaying a decision to assess the impact of Brexit, but a final investment decision will be taken by RTE.
Graves said that France, which has experienced prolonged nuclear reactor outages and has been forced to import more power from Britain, is keen on the project.
“At times of system risk, having a connection to the UK gives them extra confidence they can maintain supply,” he said.
Last week, National Grid said that taking Britain out of Europe’s energy market could stymie development of new power links and drive up the cost of imported European electricity.
“The current IEM arrangement has provided a solid framework for investments to be made and free trade between markets. We would all advocate that arrangement continues,” Graves told the committee.
Editing by David Goodman