In an interview with the Financial Times, Holliday said that doubling the interconnector capacity between the UK and continental power markets by 2020 would cost £3 billion, but would save consumers £1 billion.
The UK has 4GW of interconnection in place and is a net importer of cheaper continental power, relying on power from France and the Netherlands to meet around 5 per cent of the country’s total demand.
The UK is also linked to Ireland and Northern Ireland.
National Grid jointly operates the two continental cables and is in talks to develop the world’s longest interconnector to Norway, whilst also developing projects to boost interconnection to France and Belgium by around 1GW each.
The lower wholesale prices paid to French and Dutch generators help to keep UK prices lower, meaning further savings could be made by increasing the UK’s capacity to import.
In addition, a greater focus on developing interconnection could be a “key weapon” for the UK in meeting its rising demand, Holliday said.
The chief executive said there is a growing awareness of the need for greater interconnection at an EU level, as seen at the EU summit last month.
“All the noise was about the selection of Juncker. But real progress on energy was being made in the background,” he said.