Ofgem shortlists five new electricity interconnectors
Press release
- Publication date
- Industry sector
- Transmission Network
• Five new electricity interconnectors, announced today, could be built in next five years
• Together with two projects already assessed, potential investment of up to £6bn
• More interconnection will help with GB’s security of supply
Ofgem has today announced the names of five new interconnector projects that could be built in the future. Together with the ElecLink and Nemo projects that Ofgem has already assessed, these seven projects could lead to investment of up to £6bn and provide up to 7.5GW of additional electricity capacity in GB.
Ofgem has decided that all five of the projects submitted meet the minimum eligibility criteria. The applications follow Ofgem’s decision to extend the cap and floor regime to electricity interconnectors that can connect to the network by 2020. The proposed new interconnectors, if approved, would connect GB’s electricity network to France, Ireland, Norway and Denmark and would improve security of energy supply.
They will now move to the Initial Project Assessment (IPA) stage* of the process. Ofgem will assess the impact of the projects, how the projects interact, and whether they are likely to be in the interests of GB consumers and deliver value for money. If successful, work on some of the projects could start as early as 2016.
Martin Crouch, Ofgem’s senior partner for transmission said: “It’s excellent to find our new approach to interconnector regulation has attracted such interest. These five new projects, if approved and then built, could provide real benefits to consumers. They can help to lower electricity supply prices, lower the cost of delivering security of supply and support the decarbonisation of energy supplies.”
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Notes to editors
1. Ofgem’s letter outlining today’s decision
2. Interconnectors
Interconnectors are transmission cables that allow electricity to flow from one country to another and they can offer significant benefits for consumers. Further information from our Interconnector factsheet.
3. Cap and floor
Under the cap and floor approach, if interconnector developers’ revenues exceed the cap then revenue above the cap is returned to consumers. Conversely, if their revenues fall below the floor then consumers top up developers’ revenues to the level of the floor.
Ofgem will carry out a robust project assessment to ensure that only projects in consumers’ interests and that deliver value for money are awarded a cap and floor.
4. Project applications received
We received five applications from developers:
1 RTE (Réseau de Transport d'Électricité) is the French transmission system operator (TSO).
2 Date of connection to be confirmed by summer 2015. For further details see attached letter.
3 NGIH is a subsidiary company of National Grid Plc, established solely for the development of electricity interconnectors.
4 Statnett is the Norwegian TSO.
5 Energinet.dk is the Danish TSO.
*As we have received additional cost information from the NSN interconnector, we will also begin the Final Project Assessment (FPA) for NSN. Further details in letter.
5. Projects already assessed
ElecLink is the proposed 1GW electricity interconnector to France, being developed by Star Capital and Eurotunnel Group. Our decision to award ElecLink an exemption.
Nemo is the proposed 1GW electricity interconnector to Belgium, being developed by National Grid Nemo Link Ltd and Elia, the Belgian TSO. Our latest publications on the Nemo project.
For further press information contact:
Lisa O’Brien: 020 7901 7426
Dafydd Wyn: 020 3263 9943
Out of hours media contact number: 07766 511470