The UK needs interconnection with Europe to secure its short-term and long-term energy security. More widely, greater energy market integration is needed to boost Europe's competitiveness and improve levels of energy security across the continent.

This report argues that a single, interconnected energy market in Europe will reduce energy prices for consumers and business and help accommodate an expansion of renewable energy. However, the construction of electricity connections between countries is not keeping pace with policy ambitions. This should be a focus as negotiations begin towards agreeing an EU 2030 climate and energy package. However, these negotiations will take place in a very different political climate, with much of Europe wracked by austerity and unsettled by a growing undercurrent of scepticism about both Europe and climate change science.

The UK does not currently rely on electricity connections with Europe to avoid electricity shortfalls, as interconnection is not included in Ofgem assessments of UK electricity capacity. We argue that this position should be reviewed in line with progress towards a single energy market. As the European Commission has advised, demand-response mechanisms, energy efficiency and interconnection capacity should be considered before member states intervene in their markets to ensure sufficient capacity. Our analysis shows that UK interconnectors with Europe have proven to be reliable, even at peak times, and that Europe has enough capacity to balance supply and demand up to 2020.