OREANDA-NEWS. January 25, 2017. French energy regulator CRE approved the 1GW IFA 2 interconnector project between France and the UK, after a month-long public consultation on the project.

CRE said in December that the UK referendum vote to leave the EU had cast doubt on the economic benefits of the power link and opened a month-long consultation. CRE had already approved grid operator RTE's 2017 budget for IFA 2, but said this did not equate to full approval of the project.

CRE confirmed RTE's provisional budget of €370mn (\\$398mn) of fixed costs, and additional annual operating costs of €8.5mn. But CRE said the project could have "a net benefit of €25mn/yr at a European level", although the benefits would be greater for the UK. CRE said the project's costs and benefits for the EU would roughly break even after the UK leaves the EU, and backed the project on that basis.

The regulator also devised a ten-year incentive mechanism so that the risks and benefits are shared by RTE and those using the interconnection, notably through grid access fees.

The 1GW ElecLink project is poised to bring the overall France-UK interconnection capacity to 3GW by 2020, and work could start in July 2017. The FAB Link project, with a capacity of 1.4GW, and 2GW Aquind are likely to be reviewed by French and British energy regulators, while the 1.4GW GridLink project is also being reviewed. CRE said that if all the projects are developed, the total interconnection capacity between the two countries could stand at 8.8GW in 2030 — well above Entso-e's target of 5.4GW.