French carbon price floor could cut power imports to Britain

* Analysts expect rise in French power prices

* Export rationale weakens as price gap with Britain narrows

* British power generation hit lowest level in 20 years in 2015

* Power flows graphic <http://tmsnrt.rs/28Ocojl>

By Susanna Twidale

LONDON, June 22 (Reuters) - French plans to set a minimum carbon price for the electricity sector are likely to lead to higher power prices in the country and cut power exports to Britain, analysts said.

Britain's electricity supplies have come under increasing scrutiny as domestic generation has fallen over the past few years and last year hit its lowest level in more than 20 years.

Imports from France have more than doubled over the past six years, helping to fill the gap, and provided 4 percent of Britain's electricity in 2015.

However, France's plan to implement a carbon floor price from January 2017 is likely to reduce the wide gap in electricity prices between the two countries, making power exports less attractive.

"Our model results indicate that UK power imports from France will be cut by a third per year after the French floor is implemented," said Thomson Reuters (Dusseldorf: TOC.DU - news) carbon analyst Yan Qin.

Exact details of the French carbon price have yet to be decided but Qin expects it will be similar to Britain's carbon tax of 18 pounds ($26.41) a tonne and will increase French power prices by about 8 percent.

Illesh Patel, energy analyst at management consultancy Baringa Partners, agreed that the French price floor would lead to reduced power exports but said it is difficult to put a figure on the potential impact.

But Britain's National Grid (LSE: NG.L - news) , which owns the electricity interconnector between the countries in partnership with French grid operator RTE, played down the concerns.

The companies charge electricity generators and traders for capacity through their interconnector, with the fee depending on the difference between the two countries' power prices.

In 2015 spot prices for electricity were almost 45 percent higher in Britain than in France, data from RTE showed.

Nick Sides, National Grid's head of interconnectors, said he did not think that France's carbon price would have a big impact on the price difference.

"Only around 5 percent of France's electricity comes from fossil fuel generation, so we don't expect it (France's carbon price floor) will have a significant impact on power prices," he said.

Most of France's electricity generation comes from carbon-free nuclear plants, while more than half of Britain's generation comes from coal and gas plants, meaning that Britain's carbon tax affects a larger proportion of its electricity supply. ($1 = 0.6815 pounds)

(Editing by David Goodman)