BritNedInvesting in interconnection capacity

Damian Bach

France-UK-Ireland Stakeholder Group meeting

4th July 2008, Sellindge, Kent

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Drivers behind the interconnector project

Investment opportunity for market to trade power across the interconnector;

Supports European desire for greater interconnectivity;

Enhances security and diversity of energy supply; Facilitates energy markets.

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BritNed …… a European Commission ‘Priority Project’

50/50 Joint Venture with TenneT

1000MW HVDC link Bi-pole – two power

cables; Submarine cable

length – 260km;

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BritNed …… the programme

Initial feasibility study - 2001; Financial close – May 2007; Construction – three years:

Contracts signed May 2007 (subject to regulatory approval);

Cable supply and installation contract awarded to ABB; Converter stations contract awarded to Siemens/BAM; Total investment circa €600m; Team experience of implementation:

NorNed; Basslink; Isle of Man; France/England. Commissioning – end 2010; Commercial operations – early 2011.

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Design concept …… import and export of electricity

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Capacity for BritNed’s customers

Two ways to sell capacity: Implicit auction:

Capacity is made available to a ‘day ahead’ power exchange to facilitate ‘implicit’ trading of a combined Capacity+Energy product (virtual market coupling).

Explicit auction: Physical capacity is auctioned for a range of periods. Similar to the

England / France link.

Both comply with regulation and can co-exist within a single interconnector capacity arrangement – each operating in different timescales.

BritNed intends to offer both options.

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BritNed …… the benefits

BritNed is a commercial business serving the market:

providing open third party access and a high level of transparency;

fully supports the EU’s policy to increase electricity interconnection across member states;

widens the pool of generation available to the UK and Dutch markets, enabling more efficient use of generation in each country;

enhances security and introduces greater diversity of supply;

increases competition in the power markets.