Electricity imports ‘distort UK market’

Britain has begun – with little public acknowledgment – to import an increasing amount of electricity from continental Europe, to the extent that interconnector capacity will almost quadruple by 2030, allowing 20% of UK electricity to be imported, according to The Hidden Wiring, a new report published by the right-leaning Centre for Policy Studies (CPS). Increased imports follow the failure of Britain’s energy strategy, as set out by the government, to replace its old coal-fired and nuclear power stations with a blend of renewables and new gas-fired power stations. But the strategy is failing, says the CPS, with the amount of new gas generation falling well short of what is needed.

The report also says that:

• While interconnectors can be a useful way of delivering secure and cheap supplies across Europe, in Britain’s case it is increasingly one-way traffic. In the 12 months to March 2017, the UK imported 17 TWh but only exported 3 TWh.

• Imported electricity has an unfair competitive advantage, as it is not subject to the GB Carbon Price Floor or transmission charges faced by British generators.

• Rather than cutting carbon emissions, Britain is to some extent ‘offshoring’ them – closing down coal-fired power plants but continuing to buy energy from Europe which is likely to have come from plants of the same type.

The report argues that the UK’s energy policy must prioritise the building of new gas-fired power to deliver energy security, and that the Competition and Markets Authority should investigate the role of interconnectors. Tony Lodge, Research Fellow at the CPS, 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… 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.’