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Britain is in a stand-off with France over how much each country’s residents should pay towards planned giant new power cables under the Channel to trade electricity between the two countries.
Ofgem, Britain’s energy regulator, said the argument by its French equivalent Commission de régulation de l’énergie that British consumers should bear more of the costs was “unacceptable”, as the two sides announced this week that approval for a new project had stalled.
Britain and France already trade power across three cables under the Channel but more projects are being developed as part of a push towards closer links between the two markets.
France and Britain want another 1 gigawatt of interconnection to be developed, but in a statement to the financial markets this week, the regulators said the conditions were not yet met for approval and they would continue talks.
In a further statement, Ofgem said that after talks lasting a year, “we have not resolved how to allocate costs and revenues across British and French consumers”.
It added: “CRE’s long‑standing position is that British households and businesses should pay a far higher share of building and operating costs while taking a much lower share of export revenues. We’ve been clear this is unacceptable: it undercuts energy security and penalises our consumers disproportionately.”
The stand-off comes as Britain and the EU are also exploring ways to more closely align their electricity and carbon trading markets following Brexit, to try to smooth out electricity trading and reduce the gap in carbon pricing.
Trading power between Britain and the continent is becoming more important due to both sides’ growing use of intermittent renewable electricity, as countries with too much power during high winds can export to neighbours, and import when wind speeds are low.
France gets most of its electricity from its vast fleet of nuclear power stations, which helps power neighbours including Britain, but it sometimes imports electricity from Britain during peak times in France.
Potential new interconnector projects between Britain and France include the 1.4GW GridLink project owned by iCON Infrastructure Partners and the 1GW Eleclink 2 proposal through the Channel Tunnel.
Phil Hewitt, director at energy market specialists Montel Analytics, said there was some “anti-interconnector sentiment” in French politics but it was positive that both sides had committed to further talks.
CRE said: “Studies conducted by CRE (the French regulator) do not allow to conclude that a new interconnection with Great Britain would be profitable for France in the event of equal cost sharing between French and British consumers.
“The regulators of both countries have therefore committed to launch a joint study in order to reach common conclusions for future discussions.”