Supporting a Cost-Efficient Transition to ‘Net Zero’ for France
Benefits of Increased Interconnection Between France and Great Britain
As countries in Europe begin to emerge from the Covid-19 pandemic, there are increasing calls for a ‘green recovery’ in order for countries work 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 supporting France reach its ‘net zero’ target while also stimulating French industry. They enable market optimization over a larger geographic footprint by importing when prices are high and exporting when prices are low. This allows customers and producers 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 security of supply at a time when new energy risks are emerging.
FTI-CL Energy was commissioned to estimate the value that a proposed new electricity transmission cable between France and Great Britain, AQUIND Interconnector, would generate 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 €600m of social welfare benefit in France from 2025 to 2050 by allowing French producers greater access to the electricity-market in Great Britain, while also improving security of supply and supporting the transition to ‘net zero’ by 2050 in both countries. In addition, as a major energy infrastructure investment, the project would likely unlock €1.4bn in private investment and create 750 new jobs across France and Great Britain, thus supporting economic recovery.