EU funding for post-Brexit interconnectors

By: Tom Russell

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24/01/2019 4C Offshore
EU Member States voted on a Commission proposal to invest almost €800 million in key European energy infrastructure projects with cross-border benefits. The EU funding comes from the Connecting Europe Facility (CEF), the European support programme for trans-European infrastructure, such as electricity and gas interconnectors.

The vote concerned CEF financial aid for studies and works for a total of 14 projects: 7 for electricity, 2 for smart grids, 2 for CO2 cross-border transportation and 3 for gas. The proposed CEF-Energy funding amounts to almost €800 million, with electricity and smart grids accounting for €504 million, €9.3 million to support studies on the development of a CO2 transport infrastructure; and €286 allocated to the gas sector.

Priority is given to projects that increase competitiveness, enhance the EU's security of energy supply through the promotion of secure and efficient network operation, and contribute to sustainable development and environmental protection. Creating a connected, modern energy grid represents a crucial element of the Energy Union, one of the political priorities of the Juncker Commission.

Two of the projects which received funding were electricity interconnectors which are to link the national grid of the United Kingdom (UK) with European Union (EU) member states, Viking Link and Greenlink. Both projects received over £3m in funding and will be used to import and export electricity from Demark and Ireland, respectively. Commissioning dates for these projects are scheduled for after the impending withdrawal of the UK from the European Union on 29 March 2019.  

Post Brexit investment from the EU in UK-EU member state interconnections is unclear. Currently, the UK is in the Internal Energy Market (IEM) which is a system designed to harmonise regulations of the individual EU member state energy markets. If the UK were to remain in the IEM, it is anticipated that initiatives such as the CEF would continue to invest in interconnectors between the UK and EU member states which have been deemed as Projects of Common Interest (PCI).

The effect of not being in the Internal Energy Market could be dramatic. Further to increased regulatory complexity, access to investment initiatives for PCI may not be available and the UK would be subject to bilateral agreements. This could hamper financing and delay construction.

The UK currently operates four interconnectors which connect with European countries and Northern Ireland totalling an excess of 3.5GW with a further 2GW under construction. The majority of these projects will not be completed until after the UK has left the EU.

For more information on interconnector or subsea cable projects worldwide, click here.

About the Author

4C Offshore | Tom Russell
Tom Russell

01502 307037 Tom.Russell@4coffshore.net
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