National Grid says costs of power would go up if Britain exits EU energy market
National Grid said that each 1 gigawatt (GW) of new electricity interconnector capacity could reduce Britain's wholesale power prices by 1-2 percent, with 4-5 GW of capacity equating to a 1 billion pounds ($1.23 billion) saving.
"However, for interconnectors to be economically viable... they must be able to sell their capacity to traders and therefore require efficient and robust trading arrangements between the two countries," National Grid said in an evidence submission to the Business, Energy and Industrial Strategy (BEIS) Committeey.
Britain currently has access to tariff-free electricity trading with Europe due to its participation in the so-called internal energy market (IEM), but National Grid said leaving this market would make cross-border trade more difficult.
"While alternative arrangements can be put in place that would allow trade to continue these are unlikely to be as effective or efficient," it said.
National Grid also warned the cost of delivering new projects could rise due to Britain leaving the European Union.
"Restrictions on trade and movement of labour could impact adversely on the cost of delivering new interconnector projects," it said. ■