London, 24 October 2018

Statement regarding the ACER Board of Appeal decision on AQUIND’s appeal against the ACER decision to reject AQUIND’s request for exemption

Today, the Board of Appeal of the Agency for the Co-operation of Energy Regulators (ACER) has issued its decision to reject AQUIND’s appeal against the Decision taken by ACER whereby the Agency chose not to grant the exemption requested by AQUIND under Article 17 of Regulation (EC) 714/2009.

The Board of Appeal has advised AQUIND to apply for regulatory status pursuant to Article 12 of Regulation 347/2013 (TEN-E Regulation) and maintains that the British and French energy regulators must accept and assess such application in accordance with EU regulation, setting aside conflicting national laws.

The approach taken by ACER and the Board of Appeal to the implementation of the TEN-E Regulation and the PCIs effectively closes the door for exempt projects, introduces significant uncertainty about the future application of Regulation (EC) 714/2009 and puts at risk future private investments in the European electricity transmission infrastructure as well as the completion of the Internal Energy Market.

AQUIND is an independent project initiated without government subsidies. The development has made significant progress. AQUIND has recently been awarded the Project of Common Interest status by the European Commission. Once operational, AQUIND Interconnector will bring considerable benefits to the UK, French and European markets and power grids. AQUIND Interconnector will boost energy market competition, improve security of supply and foster greater integration of renewable power sources in France and the UK.

The decision by the Board of Appeal supports ACER’s initial assessment and acknowledges that AQUIND will make a positive impact on the European, French and British energy markets and that more interconnection between France and the UK is needed.

However, the Board of Appeal has upheld the original decision to reject the exemption request due to insufficient level of risk.

The Board of Appeal shares ACER’s position that in order for the exemption to be granted, the project should first apply for the regulated status under the TEN-E Regulation and be rejected. This interpretation of the regulations was criticised in a number of witness statements during the hearings of the Board of Appeal on 26 September 2018, including by a representative of the European Commission. Despite the criticism, the Board of Appeal upheld the decision taken by ACER.

The ACER decision states that national regulatory authorities must disregard national laws and implement the EU regulations should there be a conflict between their provisions, in particular those related to the Third Energy Package. Mr. Pototschnig, Director of ACER, in his responses to questions from MEPs at the meeting of the Committee on Industry, Research and Energy of the EU Parliament on 9 October 2018, stated that:

“According to CRE, the French legislation is blocking the development. We took the decision and we said that according to our interpretation of the current provisions, because Regulation 347, the TEN-E regulation from 2013, gives the right to a Project of Common Interest to obtain regulatory support and regulatory approval, I think this should be tested in France. In our reading, there is case law about this. CRE can disregard national legislation if it convinced [sic] that it contradicts European legislation. So, obviously, we don’t expect the project promoter to do their job, the job for the institutions, but believe that this needs to be tested.”

AQUIND is exploring all legal routes available to it in accordance with relevant legislation, while continuing the development of the project  with the target completion of the construction in 2022.

AQUIND maintains close engagement with Ofgem, CRE and the European Commission.

Note to editors:

AQUIND Interconnector is a proposed new subsea and underground High Voltage Direct Current power transmission link between the South Coast of England and Normandy in France. With the capacity of 2,000 MW, AQUIND Interconnector will improve security of supply, help foster greater renewable power integration and make the national grids more robust by supplying them with vital ancillary services. The project is fully private and has been initiated without any government subsidies.

In May 2017, AQUIND submitted an exemption request pursuant to Article 17 of Regulation (EC) 714/2009 to CRE, the regulatory authority of France, and Ofgem, the regulatory authority of Great Britain. In September 2017, both authorities formally accepted AQUIND’s request. In December 2017, ACER received a referral of AQUIND’s exemption request. In June 2018, ACER’s Director issued a negative decision, which AQUIND appealed in August 2018.