Written evidence submitted by National Grid Ventures

About National Grid Ventures (NGV)

NGV is the competitive division of National Grid plc, one of the largest investor-owned energy companies in the world. It operates outside of National Grid’s core regulated businesses in the UK and US where it develops, operates and invests in energy projects, technologies and partnerships to accelerate the development of our clean energy future.

NGVs diverse portfolio of flexible, low-carbon and renewable energy businesses across the UK, Europe and US includes sub-sea electricity interconnectors, liquefied natural gas, battery storage, wind and solar power. NGV has 50% ownership shares in assets representing nearly 8,000MW[1] of cross-border electricity interconnectors between the UK and Europe. These assets facilitate delivery of many billions of pounds of benefits to UK consumers through lower energy costs, GHG emissions, security of supply and the integration of renewable forms of electricity generation. By 2030, we estimate our interconnectors will help Britain to prevent 100mt of carbon emissions.


Executive summary


Summary of Views

We are committed to support the UK to reach its ambitious climate and energy targets. Over the last 10 years National Grid has invested more than £2.4bn in new interconnector capacity to connect the UK with its neighbours. We are developing a number of new projects with our partners around the North Sea including projects such as multi-purpose interconnectors which will play a vital role in optimising the deployment of renewable energy resources into and around the UK helping to minimise emissions from electricity generation across the continent. 

The application of a unilateral CBAM, especially to electricity, could harm progress in this sector.   

We would argue that:

  1. Where exchanges of electricity take place between the UK and countries with similar or higher decarbonisation objectives, then the application of a CBAM is unnecessary. In the case of a UK CBAM application, serious consideration should be given to increasing inefficiency in electricity trading and market distortion, as well as additional administrative burdens and procedures on cross-border electricity interconnector trading that a CBAM would introduce against the extremely low risk of carbon leakage in the electricity sector.


  1. Given that the EU and UK have very similar climate targets and carbon markets[2], there is little benefit to applying a CBAM to imports to the UK from countries with similarly low carbon emissions targets. This is particularly the case for the electricity sector where the UK can only import electricity from the European countries it is physically connected to, and where the electricity imported is overwhelmingly produced from low carbon resources and there is a similar competitive price for the ETS allowance.


Table 1: Comparison of climate & energy targets that UK and EU aim to achieve


Climate targets

Energy targets

2050 net-zero


Interconnection by 2030

Potential for offshore wind installed capacity


No more sales / production of combustion engine cars

EU/UK – legally binding target

EU – 55%
UK – 78%

EU - 15% cross-border interconnections

UK ambition to achieve 18GW of interconnections

2050 (estimated)

EU 300GW

UK – 75GW


  • 2019 – 2024: 6GW electrolyser production & 1mt green H2
  • 2025 – 2030: 40GW H2 electrolyser & 10mt green H2
  • 2030 – on: green H2 at large-scale/transportation

EU – 2035

UK 2030

2030 (targets)

EU – 60GW

UK – 40GW


  • 2030: 5 GW of low-carbon H2 production by 2030


Chart, bar chart

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Designing and implementing a carbon border adjustment mechanism

If a CBAM is taken forward, there are a number of principles that could be taken into account:





October 2021

[1] Of this capacity, all but 1.4GW is operational. The remainder is under construction with Viking Link expected to be operational in 2023.

[2] EUA – 59EUR/t & UKA – 54£/t on 27 October 2021, EUA and UKA.

[3] Zero-Carbon to be interpreted as wind, solar, nuclear, hydro, storage, other embedded renewable energy sources.

[4] Reuters, “Businesses urge EU and Britain to link their carbon markets”, 15 April 2021,