(Bloomberg) -- Aquind Ltd. signed an accord with Reseau de Transport d'Electricite SA to connect a power cable with the French grid, even as the U.K.'s exit from the European Union poses risks for the project.
The 1.1 billion-pound ($1.4 billion) two-way interconnector will be able to deliver 2 gigawatts of capacity, or enough to supply about 4 million homes, Wallsend, England-based Aquind said in an emailed statement. It's due to be completed in 2022 and now holds connection deals in both countries, it said.
There's a risk that cables may face trade tariffs once Britain leaves the EU, though the nation may instead remain part of the bloc's energy market, Aquind's non-executive director Martin Callanan said in an interview in London. There are four existing interconnectors linking Britain and its neighbors, with 10 planned links including Aquind's, according to Groupe Eurotunnel SE, which owns one of the proposed connections.
“Brexit has introduced a level of uncertainty, but it's not interrupting the project,” Callanan said, referring to Aquind's interconnector. “We want to be ahead of the queue.”
U.K. lawmakers will be seeking to ensure the country retains cheap energy as a priority in Brexit talks, he said.
“I'm sure that the political focus on negotiations will be tariff-free access to European markets,” said Callanan, who is also a member of the U.K. Parliament's House of Lords.
Linking to France makes sense amid concerns over when Britain's nuclear stations will be replaced as well as Europe's reliance on Russian natural gas, Callanan said.
Electricite de France SA, Europe's biggest power producer, may struggle to build its planned atomic station at Hinkley Point in the U.K. and delays are likely, said Lakis Athanasiou, a utilities analyst at Agency Partners LLP in London.
“If it's the 2020s, it's the late 2020s,” he said Tuesday by phone.
To contact the reporters on this story: Mathew Carr in London at m.carr@bloomberg.net, Weixin Zha in Frankfurt at wzha2@bloomberg.net.
To contact the editors responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net, Andrew Reierson, Rob Verdonck
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