Initial Project Assessment of the third cap and floor window for electricity interconnectors

  • Upcoming
  • Open
  • Closed (awaiting decision)
  • Closed (with decision)

Interconnectors are the physical links that connect our electricity system with those of other countries and territories, enabling cross-border trade of electricity. Ofgem’s cap and floor regime has been successful in attracting investment to increase interconnector capacity over the last decade. At the Initial Project Assessment (IPA) stage, Ofgem assesses the projects’ suitability for a cap and floor regime, and this document outlines our minded-to position on which interconnectors to grant a cap and floor in principle based on that assessment.

Interconnectors are no longer expected to predominantly be a source of cheap electricity imports as they have been when the cap and floor regime was first established, but instead going forward will become a way of providing flexibility and enhancing security of supply in a renewables-dominated energy system. The applicants for Window 3 were assessed using an expanded assessment framework to consider wider benefits of interconnectors beyond socioeconomic welfare (SEW), acknowledging interconnectors’ potential to capture new security of supply and decarbonisation benefits. Additionally, we have placed more emphasis on the maturity and deliverability of projects compared to previous windows, assessing the capability of Window 3 projects to start operating prior to the end of 2032.

The third application window for the cap and floor regime ran from September 2022 to January 2023, and seven projects applied.

The seven projects assessed are:

  • Aminth (1.4GW to Denmark)
  • AQUIND (2GW to France)
  • Cronos (1.4GW to Belgium)
  • LirIC (0.7GW to Northern Ireland)
  • MaresConnect (0.75GW to Republic of Ireland)
  • NU-Link (1.2GW to the Netherlands)
  • Tarchon (1.4GW to Germany)

Since publication of our consultation on 1 March 2024, we have received a number of requests for additional data to be made available in relation to the supporting analytical reports from NGESO and our consultants Arup. Some additional data has already been provided and we continue to work to respond to other reasonable requests. To allow for reasonable time for stakeholders to consider additional material, we are extending the closing date of the consultations from 30 April to 31 May 2024.

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Nick Pittarello

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