l Murdo Maclean, partner and energy sector specialist at legal firm Pinsent Masons: The UK has been at the forefront of promoting interconnectors as a reliable and resilient method of transporting and trading electricity to, from and with our European and Irish neighbours. While Brexit heralds a loosening of connections with Europe, we can take some comfort that the development of strategically important energy interconnectors is certain to continue, albeit at a more cautious pace. Britain has four interconnector links – two to Europe via France and the Netherlands and two to Ireland – which have a total capacity of 4 gigawatts (GW). Net imports of electricity through the interconnectors represent around 5 per cent of Britain’s existing generation capacity. In the short term, interconnector capability is expected to almost double in the next four years as two new links to northern France and one to Belgium come on stream, while a number of other projects could add a further 10GW of capacity over the next decade or more. Given that the government’s clearly stated position is that the UK will be leaving the EU Single Market, it follows that it will also leave the Internal Electricity Market (IEM). It remains to be seen if some sort of bilateral agreement allows us to remain part of the wider internal energy market and enables electricity to continue to flow in both directions without trade barriers, tariffs or other restrictions. Notwithstanding this lack of clarity, I would wager that shrewd equity investors will take the view that the requirement for interconnectors between the UK and the Continent as a vital element of our energy supply chain will remain unchanged.
Scotsman 24th Nov 2017 read more »