Posted on: 24/10/2017
A growing reliance on energy imported from Europe is putting Britain’s security of supply at risk and threatening higher prices, a report has warned.
The Centre for Policy Studies (CPS) said the country was importing an increasing amount of electricity from continental Europe.
It said is now projected that the UK will receive 67 TWh of power from undersea interconnectors by 2030, a tenfold increase in the projection made in 2012.
The CPS said rising imports were against a backdrop of the UK Government failing to meet its ambition to replace its old coal fired and nuclear power stations with a blend of renewables and new gas fired power stations.
It pointed out that the 2012 Gas Generation Strategy estimated that 26 GW of new gas generation would be needed by 2030. Yet the actual amount of new domestic capacity being created is falling well short.
Surplus supplies in Europe declining
The report highlighted concerns about growing reliance on imported electricity from Europe as surplus supplies there decline.
“This is particularly the case in light of the German elections. Germany is already decommissioning its nuclear plants. If the Greens form part of the governing coalition, as is likely, they will demand the closure of fossil-fuel plants,” it points out.
“The more reliant Britain becomes on energy imported from Europe, the more vulnerable we become to disruptions in supply, to sudden price spikes, or a wider tightening of capacity which pushes up prices,” said the report.
“This imported electricity also has an unfair competitive advantage, as it is not subject to the GB Carbon Price Floor or transmission charges faced by British generators.”
The report argues that the UK’s energy policy must prioritise the building of new gas fired power to deliver energy security.
The paper also argues that there should be a Competition and Markets Authority inquiry into the role of interconnectors.
Tony Lodge, Research Fellow at the CPS and lead author of the report, said:
“At a time when spare electricity generating margins across Europe are falling, it does not make sense to build an infrastructure which risks making the UK over-dependent on imports.
There are significant supply, cost and market distortion implications of doing this at a time when the Government should be looking to strengthen energy security and reduce bills.
It would make much more sense for the UK to build up a safe electricity supply surplus from generators in Britain on a fair and level playing field.”