Reducing the Cost of Transition to ‘Net Zero’ for GB Consumers
Benefits of Increased Interconnection Between Great Britain and France
As countries in Europe begin to emerge from the Covid-19 pandemic, there are growing calls for a ‘green recovery’ in order for countries to meet their 2050 ‘net zero’ emissions targets. However, policymakers also need to protect customers and businesses from potential increases in energy costs, not only while economic activity is still recovering, but also in the long term.
Electricity interconnectors, which are transmission links that enable electricity to flow between two countries, can play a role in enabling the UK to reach its ‘net zero’ target while reducing the cost of electricity to GB consumers. They enable market optimisation over a larger geographic footprint by importing when prices are high and exporting when prices are low. This allows customers to benefit from structural differences in generation mix across regions, while also supporting the integration of variable renewable energy into the energy system and contributing to the security of supply.
FTI-CL Energy was commissioned to estimate the value that a proposed new electricity transmission cable between Great Britain and France, AQUIND Interconnector, would create for GB consumers from the start of its operation through to 2050. Using our in-house power market dispatch model, we find that the project would generate over £2.3bn in consumer savings in Great Britain by enabling imports of cheaper electricity. In addition, as a major energy infrastructure investment, the project would likely unlock £1.2bn in private investment and create 750 new jobs across Great Britain and France, supporting economic recovery.