Nemo Link Electricity Interconnector first End of Period Assessment (EPA)
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Ofgem’s cap and floor regime was established to incentivise the development of electricity interconnectors in Great Britain. The regime sets a maximum (cap) and minimum (floor) level for the revenues that the interconnector licensee can earn over a 25-year period, with periodic assessments taking place every five years.
To determine the End of Period Cap and Floor Revenue Adjustment term, cumulative revenues generated by the interconnector over each five-year period are compared against the cumulative cap and floor levels through an End of Period Assessment (EPA). Top-up payments are made to the interconnector licensee if the revenue value is below the floor; and similarly, the licensee pays revenues in excess of the cap to consumers.
This publication details our determination of the first EPA for Nemo Link Limited with respect to the Nemo Link Interconnector to Belgium. The Relevant Assessment Period for this EPA is 31 January 2019 to 31 December 2023.
As Nemo Link is jointly regulated by Ofgem in Great Britain and the Commission for Electricity and Gas Regulation (CREG) in Belgium, the value of the resulting Revenue Adjustment term is split 50/50 between GB and Belgian consumers.
We also provide commentary on the operational performance of the Nemo Link interconnector and use this opportunity to look back at the estimates and values established at the project’s post construction review.