By the OGJ Online Staff
HOUSTON, Mar. 14�Operators of the single electricity submarine cable linking the UK and France agreed to open up access to the infrastructure used for electricity export and import between the two countries, following European Commission concerns.
Up to now, the 15-year-old interconnector was used exclusively by Electricite de France (EDF) to export power to the UK.
European Competition Commissioner Mario Monti said the agreement marks an important improvement toward a more competitive and integrated electricity market in the European Union (EU) and another step in bringing the benefits of intra-EU trade in electricity to business users and ultimately households.
"Like in the telecoms and airline sectors, the liberalization and integration of Europe's electricity markets will lower prices and, therefore, cut costs for business users which will see their competitiveness increased not just in Europe but also globally. This is turn will translate in more jobs for the European bloc," Monti said.
The interconnector, with a total capacity of 2,000 Mw in either direction, is jointly owned by the Transmission System Operators (TSO), who also operate the electricity networks of England and Wales and of France.
The England and Wales TSO, the National Grid, is an independent company. The French TSO, R�au de Transmission d'Electricit�RTE), is legally part of EDF, although it has independent management.
The interconnector's operational costs are not recovered by transmission charges but only through the fee paid for its use. In practice, use of the interconnector has so far been reserved exclusively to EDF for exports to the UK, under an existing agreement which expires this month.
After consulting with the Commission, the interconnector's owners agreed to open up access without any reserve being made in favor of any particular company. Under the new agreement, capacity of 1,500 Mw will be tendered in 50 Mw blocks for 3 years, 350 Mw will be auctioned annually in 1 Mw blocks, and 150 Mw will be auctioned daily in 1 Mw blocks.
Violation of EU law
In the Commission's view, restrictions on transmission rights would have been contrary to EU competition law, since it would have amounted to a potential abuse of dominant position. Granting a transmission priority right in favor of a particular company would have allowed it to circumvent the rules for capacity allocation applicable to other market operators.
The Commission said this could have been regarded as discriminatory treatment by the TSOs, which are in a dominant position in the market for transmission of electricity between the continent and the UK, a substantial part of the common market. Such discrimination would have put those other operators at a competitive disadvantage in relation to EDF.
The French network operator RTE also reviewed the system for moving electricity in France to insure the procedures and duration of those transit rights are compatible with the transmission rights to the interconnector. As a result, operators in other continental member countries who want to transmit electricity to the UK through the UK-France interconnector won't be hampered by restrictive transit rights allocation in France.
Equally, RTE offered transit rights from Spain that would match capacity allocated in the auctions of the Spain-French interconnector's capacity. Finally, congestion costs and losses in France will be borne by RTE.
Opening up of the UK-French interconnector follows up recent improvements in access to interconnection capacity in the cables linking the high-tension electricity grids of Scandinavian countries and Germany after Commission intervention.
The Commission said it will continue to monitor interconnectors between EU member countries, including those linking Germany and the Netherlands, the Netherlands and Belgium, and France and Spain. The Commission said it will pay particular attention to congested interconnectors.