France-UK energy deal to boost green energy trade
Cooperation on hydrogen stemming from the new France-UK energy deal would benefit transport infrastructure and promote trade, say experts.
The France-UK energy cooperation agreement on renewables, nuclear and low-carbon technologies, which was signed in a bid to increase energy security, is expected to boost green energy trade between the two countries, commentators said.
Under the deal, signed on March 10 by UK energy security secretary Grant Shapps and France’s energy minister, Agnes Pannier Runacher, the UK and France intend to develop their cooperation on civil nuclear, to capitalize on both countries’ ambitions to significantly grow their sectors.
Moreover, the two governments want to work together to tackle barriers to deploying fast-developing low-carbon technologies, including hydrogen and carbon capture and storage (CCS).
They also aim to increase power interconnection capacity between the two countries by up to two thirds from the current 4 GW, amid the UK’s goal to reach at least 18 GW of interconnection capacity by 2030.
The deal “marks a fantastic opportunity to bolster clean, renewable energy, further UK-France nuclear cooperation” and “heighten our energy independence,” a spokesperson for UK trade body Energy UK told Gas Outlook.
Cooperation on hydrogen would benefit transport infrastructure development as well as promote trade between the two countries, Anise Ganbold, head of research, global energy markets and hydrogen at Aurora Energy Research told Gas Outlook.
“A hydrogen pipeline is the lowest cost way to transport hydrogen over land, and similar to gas pipelines, these require intergovernmental cooperation,” she said.
Moreover “enabling trade in hydrogen” would be a key advantage of the deal.
“Great Britain can produce renewable hydrogen more cheaply than France” she said, adding that “in order for the countries to trade with each other, they would need to agree on the definition of renewable hydrogen.”
“The countries could also discuss hydrogen produced via a cross-border power purchase agreement, where the electrolyser is located in one country and the renewable power plant in the other,” she added.
The UK is targeting 10 GW of low carbon hydrogen production by 2030 and wants to establish itself as a top hydrogen exporter globally as part of its Hydrogen Strategy published in 2021.
The UK already exports fuel-cell and electrolyser technology and has earmarked £2 billion to finance hydrogen projects overseas, in order to create export opportunities for British companies, according to the Hydrogen Strategy.
Similarly, France’s ambition is to become a key hydrogen player at a world level, and is targeting achieving 6.5 GW of electrolysis capacity by 2030.
The UK government also hopes that increasing power interconnection between the two countries will help tackle high energy prices, in a move that would further increase the UK’s reliance on power imports from France. Already, the UK is a net importer of electricity from France, which supplied 13.7 TWh in 2021.
France was also the main source of all net imports of electricity to the UK, which totalled 24.6 TWh in 2021. Other sources of power imports include the Netherlands, Belgium and Norway.
“Increasing electricity interconnection will be critical in supporting the buildout of renewables, particularly offshore wind and will also play a vital role in ensuring security of energy supply in both the UK and France,” a spokesperson for Energy UK told Gas Outlook.
UK energy regulator Ofgem estimates the benefits for GB consumers from all electricity interconnector projects to date is more than £20 billion, and analysis by the Carbon Trust found that deploying flexible technologies in the period 2015 – 2050, such as interconnection, could deliver savings of up to £40 billion.
Ukraine’s invasion by Russia “has demonstrated that energy security can only be achieved by working with our international friends,” said UK energy security and net zero secretary Grant Shapps.
“We are already partnering with France through these energy interconnectors, but we share the ambition to go much further.”
“Today’s agreement could lead to two thirds boost in our interconnected power bringing more energy security and independence to the United Kingdom and France,” he said.
Furthermore, on CCS, the UK’s North Sea has the potential to store 78 billion tonnes of CO2 on the UK continental shelf, which could be turned into a multi-billion-pound industry, supporting up to 50,000 jobs in 2030, the government said.
“The UK France partnership will advance the CCUS industry in the UK where there is an abundance of potential storage,” the spokesperson for Energy UK said.
“This deal will aim to increase investment in the CCUS industry in the UK and provide an examination of the potential of cross-border CO2 transport and storage, acknowledging the shared regulatory barriers to address.”
As part of the deal, France and the UK will also work together, along with other G7 leaders, to take concerted action to cut reliance on civil nuclear and related goods from Russia, including working to diversify their supplies of uranium and nuclear fuel production capability.
The two countries have a decades-old partnership on nuclear power, with French company EDF leading the development of Hinkley Point C in Somerset, and the UK Government featuring among the shareholders of the proposed Sizewell C project in Suffolk with EDF, following an historic £700 million investment announced by Grant Shapps last November.
This investment controversially represented the first state-backing of a nuclear project in Britain in over 30 years.