UK 'needs links' to help decarbonise

Electricity interconnectors linking the UK to continental Europe could save British consumers £1bn ($1.7bn) a year and help meet the country’s carbon reduction targets more cost effectively, think tank Policy Exchange claims.

In a new report called Getting Interconnected, Policy Exchange says that foreign power plants should be allowed to compete for subsidies in the UK government’s new capacity market, due to be launched later this year.

Policy Exchange argues that such an approach would also help to reduce the overall cost of decarbonising the UK’s power grid.

The report suggests that purchasing zero-carbon electricity generated by such countries as Iceland and Norway would be cheaper than subsidising home-grown green power sources.

The think tank claims that while offshore wind currently saves one tonne of carbon at a cost of £85, an interconnector between the UK and Norway that could take advantage of Norwegian hydro power, would deliver the same emissions savings for only £17.

“Great Britain already has four operational interconnectors in place to France, the Netherlands, Ireland and Northern Ireland, while at least eight more are at various stages of development,” says report author Simon Moore.

The report claims unnecessary regulatory and policy barriers are preventing the rapid expansion of new interconnection.

For example, European regulations which limit profits on interconnectors make investing in them less attractive to potential backers.

It says in the new market the UK has introduced to subsidise generation capacity, neither interconnectors nor overseas power stations are able to enter the first auctions this year. “The government is looking for ways to allow overseas participation in the future,” it says.

“Installing more power lines between the UK and Europe could help the UK to cut energy bills and meet our aggressive carbon targets more cost-effectively.

"But misguided regulation from the EU is getting in the way of interconnectors being built to Britain. This needs to be overturned," says Moore.

“The government must focus on delivering the cheapest, greenest electricity for people and businesses. It must not be distracted by secondary goals like ‘green jobs’ that risk pushing up the cost of electricity,” he adds.