EDF access to new UK-France power link should be limited -report
LONDON (Reuters) - France's biggest power producer EDF should have limited access to a new interconnector planned between France and Britain to curb the company's ability to influence power prices, a report for the British and French energy regulators said on Thursday.
Plans for the 1,000-megawatt ElecLink interconnector between France and Britain are currently being assessed by the regulators, with the start of operations expected in 2016.
Analysts from consultancy London Economics commissioned by the regulators to analyse the impact of the new power link recommended EDF's use of ElecLink capacity should be limited to 20-40 percent.
"Based on the analysis and our judgment, we recommend that EDF's total allowed share of the total interconnector capacity be limited to between 20 and 40 percent in either direction," the report said.
London Economic's analysis showed EDF's strong market presence gives it ability and incentive to raise power prices in either country.
EDF was not immediately available to comment.
ElecLink itself had proposed a limit of 50 percent.
State-owned EDF owns all of France's nuclear power plants. Its UK subsidiary EDF Energy also has a large market share in Britain where it operates all but one nuclear station.
Britain sees building interconnections with neighbouring countries as a way to manage fluctuating renewable energy production and is considering laying other cables to Norway, Belgium and Denmark.
Interconnectors are typically used to transfer electricity from the higher priced region to the lower priced region to balance out electricity value.
Owners of capacity in both markets can technically use their position to influence price-setting factors if they have access to substantial transfer capacity.
Long-term and short-term capacity on the ElecLink interconnector will be allocated through open auctions, making it technically possible for EDF to bid for a high amount of capacity.
The project is jointly developed by France's Eurotunnel , which operates the subsea tunnel, and UK-based fund manager Star Capital Partners.
The French and British energy regulators on Thursday launched a market consultation on ElecLink's application to be exempt from EU rules allowing third-party access.
France and Britain are already connected via a 2,000-MW subsea power cable that has been operating since the 1980s.
(Reporting by Karolin Schaps. Editing by Jane Merriman)
