28.6.2018

ACER publishes its Decision on the exemption request for the AQUIND interconnector

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​ACER publishes today a Decision, adopted on 19 June 2018, on the request for exemptions from some regulatory provisions of the EU Electricity Regulation and the Electricity Directive in the Third Energy Package for the AQUIND Interconnector between France and Great Britain. The Agency has decided not to grant the requested exemptions from the provisions on the use of congestion revenues, on unbundling, on third party access and on terms and conditions for connection and access, including tariffs.

In the Agency’s view, the AQUIND Interconnector project does not meet one of the conditions set in Article 17 of the EU Electricity Regulation (EC) No 714/2009, which requires that the level of risk attached to the investment be such that the project would not be realised unless an exemption were granted.

In particular, the Agency was not able to identify with the required certainty a level of risk for the AQUIND Interconnector that would lead to the project not to be realised without the requested exemptions. In fact, the Agency considered that the status of EU ‘Project of Common Interest (PCI), recently granted to the AQUIND Interconnector, allows the project promoter to submit to the relevant regulatory authorities an investment request, including a request for cross-border cost allocation, that could result in a decision to recover its efficient incurred costs via regulated tariffs.

The possibility for the AQUIND interconnector to follow a regulated route is even more relevant when considering  the Agency’s assessment of the need for capacity on the border between France and Great Britain, which concludes that the three new projects under development on that border –AQUIND Interconnector, FAB Link, and GridLink (with a total capacity of 4.8 GW) – appear to be socially beneficial on top of the capacity provided by the existing ‘IFA interconnector’ and the two projects currently under construction: ‘ElecLink’ and ‘IFA2’.

Accordingly, the Agency could not identify a level of risk related to a lack of financial underpinning via the regulatory regime which would meet the condition of Article 17 of the EU Electricity Regulation.

In addition, the Agency came to the conclusion that other risks claimed by AQUIND Limited, including, among others, technological, construction, operation, policy, and macroeconomic risks, were not such that this condition for exemptions under the mentioned Regulation would be met. 

You can find the Decision her​e​.

Background

According to Article 17 of Regulation (EC) No 714/2009, regulatory authorities may grant, upon request, exemptions from the provisions of Article 16(6) of Regulation (EC) No 714/2009 and Articles 9, 32 and Article 37(6) and (10) of Directive 2009/72/EC, provided that specific conditions are met. One those conditions requires that the level of risk attached to the investment at issue is such that the investment would not take place unless an exemption is granted (Article 17(1)(b) of Regulation (EC) No 714/2009).

According to Article 17(4) and (5) of Regulation (EC) No 714/2009, the regulatory authorities receiving a request for exemption should reach an agreement and take a decision on that request within six months after the receipt of the request by the last regulatory authority; where the regulatory authorities are not able to reach an agreement within that period or upon their joint request, the Agency becomes responsible for adopting the decision concerning the request for exemption.

Following a joint request by CRE and Ofgem, on 19 December 2017, the Agency became responsible to adopt a decision concerning AQUIND Limited’s request for exemptions. Before taking its decision, the Agency carried out consultations with the relevant parties. The Agency also invited any third party to send observations regarding AQUIND Limited’s request for exemptions (see relevant public notice and responses here​).