The Trade and Cooperation agreements (TCA) agreed on December 24, 2020 dedicates specific attention to the cooperation between the UK and the EU on efforts to combat climate change. As part of this cooperation, the TCA established a new regulatory framework for energy infrastructure linking the member states of the European Union and the United Kingdom, including an exemption regime similar to that in Regulation 2019/943 under which AQUIND submitted the ongoing Exemption Request.

Following discussions with Ofgem and its French counterpart the Energy Regulatory Commission (CRE) have published a decision to discontinue the ongoing consultation and assessment process of the Exemption Request.

Ofgem and CRE will continue to cooperate closely in regards to the functioning and the development of interconnections between the UK and France and the implementation of the arrangements envisaged in the TCA. As a result, AQUIND is continuing to engage with the regulatory authorities and other stakeholders, so as to ensure AQUIND Interconnector is operational as soon as possible.

Indeed, in November 2020, AQUIND successfully appealed at the General Court of the Court of Justice against the Agency for the Cooperation of Energy Regulators (ACER)’s decision to reject an application for exemption pursuant to Article 17 of Regulation (EC) No 714/2009, which obliges ACER’s Board of Appeal to review its original decision, a process that is currently ongoing. The judgment has also EU-wide implications as it clarifies EU law in a point of importance to all EU interconnectors. It also clarifies the scope of the Board of Appeal of the European regulator, ACER. Further clarifications at European and national levels are awaited, to confirm the status of the project.

In particular while awaiting these clarifications, the evaluation of the request for Environmental Authorisation submitted in October 2019 by AQUIND has been interrupted by the French authorities, without this decision calling into question the environmental quality of the project.  Such a decision is not uncommon, and does not prevent AQUIND from securing the relevant French planning consents required to construct and operate AQUIND Interconnector.

Furthermore, this decision will not impact the ongoing Examination of the UK Development Consent Order (DCO) application, which is due to close on 8^th March 2021, with a final decision made by the Secretary of State in September 2021.

Commenting on the news, a spokesperson for AQUIND said: “We are confident that recent decisions will not prevent us obtaining the necessary consents required to build and operate AQUIND Interconnector, and as a result AQUIND is continuing to engage with the appropriate stakeholders.”

Once approved, AQUIND Interconnector will help to integrate a greater proportion of non-fossil fuel energy sources and intermittent renewables generation into the GB energy mix, helping to meet the UK’s 2050 Net Zero target by reducing CO₂ emissions by approximately 40 to 70 million tonnes over the first 25 years of operation, according to the pan-European Ten Year Network Development Plan 2020. Furthermore, The United Kingdom, which will host the 26th annual UN climate conference (COP 26),  published recently the Energy White Paper which highlights the UK Government’s commitment to reach 18 GW of interconnection capacity by 2030 demonstrates the important role that interconnectors will play in decarbonising the UK economy.

The Network Option Assessment for Interconnectors 2020/2021 prepared by National Grid ESO to reflect Net Zero decarbonisation targets, further emphasises a need to urgently increase GB interconnection capacity. With France in particular, there is a need of at least 8.8GW of interconnection capacity on average. The report says that this level of interconnection is essential for the UK to meet 2050 Net Zero targets and to provide the most benefits to the consumers.  These findings support the outcomes of TYNDP 2020 and AQUIND’s own analysis, published and discussed by the regulators as part of the consultation, which concludes that AQUIND will create €2.3bn of social welfare benefit to the GB consumers and €4.4bn of social welfare benefits to the French producers over the first 25 years of the project’s operation.