Aquind to appeal EU energy regulator UK-France power cable decision

LONDON, June 29 (Reuters) - Private investment firm Aquind will appeal a decision by the European Union energy regulator agency not to exempt its high-voltage undersea power cable project between Britain and France from certain EU electricity regulations.

Under EU rules, revenues generated by power transmission operators must be used to guarantee availability and reinvested to increase interconnection capacity.

UK-based Aquind was seeking exemption from the regulations to use the profits from the 1.4 billion euro ($1.6 billion) interconnector to repay investors.

The French energy regulator referred Aquind's request for exemption to the EU Agency for the Cooperation of Energy Regulators (ACER) at the end of last year.

ACER said the project was not at risk of being abandoned if the exemptions were withheld.

"In the Agency's view, the AQUIND Interconnector project does not meet one of the conditions (...) which requires that the level of risk attached to the investment be such that the project would not be realised unless an exemption were granted," it said in a statement.

In response, Aquind said it would appeal the decision as it believes the project meets all the necessary criteria for exemption.

"Aquind's interconnector will boost energy market competition, improve security of supply and foster greater integration of renewable power sources in France and Britain," the firm said in a statement.

Several new electricity interconnectors between Britain and continental Europe are planned due to the risk of a power supply crunch next decade as ageing nuclear reactors go offline and coal plants close.

Aquind's 2-gigawatt (GW) interconnector is due to be completed in 2022.

Britain is currently linked to France through the 2 GW IFA high voltage link, owned by French state network operator RTE and Britain's National Grid (LSE: NG.L - news) . Another link, IFA2, is under construction and expected to be complete by 2020.

($1 = 0.8584 euros) (Reporting by Nina Chestney; Editing by Jan Harvey)