The Commission for the Regulation of Energy (CRE) made the decision following a consultation on the IFA2 interconnector which it began in December last year. The subsea link is being developed by National Grid and its French equivalent RTE.
RTE applied for approval in April 2016 but did so on the understanding that the UK would remain a member of the European Union. It was compelled to reapply following the Brexit vote on 23 June.
“In general, the various promoters believe that the economic fundamentals of the projects remain the same, whether or not the United Kingdom is in the European Union,” said CRE, explaining its decision. “The consequences of Brexit on the project remain very limited.”
CRE said the project will have economic benefits for Britain, France and Europe as a whole, although the UK will be the main beneficiary. It has given RTE until the end of 2018 to make a final investment decision.
The interconnector is scheduled to be up and running by 2020 and is expected to cost €740 million (£717 million) to build. It will run from Chilling near Southampton in Hampshire to Tourbe near Caen in Normandy.
Fareham Borough Council granted outline planning permission to the interconnector earlier this week, subject to the completion of a section 106 agreement. A further detailed planning application for the converter station buildings at Solent Airport and new public open space around the site will be submitted to the council later this year.
Ofgem awarded a license to a 1.4GW interconnector between Norway and the UK in June.