Posted on: 09/02/2016
Greater use of interconnectors could lead to increased energy costs and emissions, according to a new report.
The report by Aurora Energy Research also warns more interconnection between European markets does not improve security of supply.
Its ‘Dash for Interconnection’ study looked into the impact of new electricity interconnection with neighbouring markets including France, Norway and Belgium.
Three key risks
The report highlighted three key risks of interconnection:
Consumers incur significant costs as interconnector subsidies and charge exemptions need to be financed through taxes and electricity bulls.
Total European CO2 emissions increase as gas fired generation in the GB market is undercut by dirtier coal fire generation in mainland Europe
More interconnection does not provide more security of supply as it displaces an equivalent amount of domestic baseload capacity which is at least as reliable as interconnection and potentially more so.
But the report said steps could be taken to mitigate the risks: “Given the right policy and market conditions, interconnection has the capacity to contribute towards the three principal objectives of energy policy: affordability, decarbonisation and energy security.”