Decision on the Final Project Assessment of the NeuConnect interconnector to Germany


Publication date


Industry sector

Transmission Network

The cap and floor regime is the regulated route for interconnector development in GB. There are three main stages to our cap and floor regime – the Initial Project Assessment (IPA), the Final Project Assessment (FPA) and the Post Construction Review (PCR). Following our IPA of the NeuConnect interconnector we decided to grant the project a cap and floor regime in principle in January 2018.

The NeuConnect project is being developed by NeuConnect Britain Limited. It will be a 1400MW interconnector between Isle of Grain in Kent, Great Britain and Wilhelmshaven in Germany. Our cap and floor regulatory regime applies to the GB portion of the cost and revenues of the project (50% share).

As part of the FPA process, we conducted a cost assessment of the NeuConnect project and set out our view on efficient expenditure which informs the project’s provisional cap and floor levels. We also provided confirmation of the cap and floor regime design that apply to the NeuConnect project.

This paper is a decision on the costs and technical aspects of the FPA for the NeuConnect interconnector. Following financial close, we will update the cap and floor financial model and publish the preliminary cap and floor levels based on the costs that we have assessed in this document. We will then confirm the final cap and floor levels for the project prior to operation at our PCR stage.

In June 2021, we modified the licence conditions for NBL in order to implement our cap and floor regime and variations to the regime for NBL that are contained in our May 2020 decision.

We are also publishing a Section G Direction for NBL alongside our FPA decision. This Direction brings into effect Section G (Cap and Floor Conditions) of the standard licence conditions. The Section G conditions of the standard licence conditions are switched off by default for all electricity interconnector licensees until the Authority issues a Section G (Cap and Floor Conditions) Direction to switch them on.