Electricity interconnectors

Electricity interconnectors are the physical links which allow the transfer of electricity across borders.

Interconnectors derive their revenues from congestion revenues. Congestion revenues are dependent on the existence of price differentials between markets at either end of the interconnector. European legislation governs how capacity is allocated. It requires all interconnection capacity to be allocated to the market via market based methods, i.e. auctions. It also includes specific conditions on how revenues are used.

Britain’s electricity market currently has 4GW of interconnector capacity:

  • 2GW to France (IFA)
  • 1GW to the Netherlands (BritNed)
  • 500MW to Northern Ireland (Moyle)
  • 500MW to the Republic of Ireland (East West).

Under the present regulatory regime based on EU and GB requirements, there are two general routes for interconnector investment:

  1. a regulated route under the 'cap and floor' regime. This is a relatively new regime, we decided to roll out the cap and floor regulatory regime to new near-term electricity interconnectors in May 2014.Through the cap and floor approach developers identify, propose and build interconnectors and there is a cap and floor mechanism to regulate how much money a developer can earn once in operation. If applying for a cap and floor regime developers have to comply with all aspects of European legislation on cross border electricity infrastructure. More information about the design of the cap and floor regime can be found in the documents below.
     
  2. as an alternative to the cap and floor model, developers can still seek exemptions from regulatory requirements. Under this route developers would face the full upside and downside of the investment and would usually apply for an exemption from certain aspects of European legislation in order to increase the safeguards for the business case of their investment.

Existing and future interconnector projects

Below is a list of existing and future interconnectors.

As with other major infrastructure projects future interconnectors face a range of challenges that can impact on timing of delivery. The estimated delivery dates shown below reflects our understanding of developers existing delivery plans for future interconnectors.

PROJECT NAME DEVELOPERS CONNECTING COUNTRY CAPACITY CAP AND FLOOR REGIME? EXEMPTION? DELIVERY DATE/ ESTIMATED DELIVERY DATE
IFA National Grid Interconnector Holdings (NGIH) and RTE France 2000MW No No 1986
Moyle Mutual Energy Ireland 500MW* No No 2002
BritNed NGIH and TenneT Netherlands 1000MW No Yes (Second Package) 2011
EWIC EirGrid Ireland 500MW No No 2012
ElecLink Star Capital Partners Limited and Groupe Eurotunnel France 1000MW No Yes (Third Package) 2019
NEMO NGIH and Elia Belgium 1000MW Yes No 2019
NSN NGIH and Statnett Norway 1400MW Yes No 2020
FAB Link Transmission Investment and RTE France 1400MW Yes No 2022
IFA2 NGIH and RTE France 1000MW Yes No 2020
Viking NGIH and Energinet.dk Denmark 1000MW Yes No 2022
Greenlink Element Power Ireland 500MW Yes No 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Moyle has been operating at around half of its normal 500MW capacity due to subsea cable faults since 2012.

Publications and updates

  • Published: 3rd Mar 2017
  • Closing: 31st Mar 2017
  • Consultations & responses
  • 1 Associated documents
This consultation sets out Ofgem’s proposals as to how GB interconnectors involved in the “CACM Pilot Projects”, will recover their costs associated with these projects.

  • Published: 21st Dec 2016
  • Closed: 27th Jan 2017
  • Consultations & responses
  • 1 Associated documents
Ofgem minded-to position on Interest During Construction for Offshore Transmission and Interconnectors granted the Cap and Floor Regime for 2017/18.

  • Published: 21st Dec 2016
  • Expected: Apr 2017
  • Consultations & responses
  • 0 Associated documents
Upcoming consultation: Notice of statutory consultation on a proposal to insert new special conditions into the electricity interconnector licence held by National Grid NSL Limited.

  • Published: 14th Dec 2016
  • Reports & plans
  • 3 Associated documents
See the second iteration of the supply chain plans for the FAB Link, IFA2, Viking Link and Greenlink interconnector projects.

  • Published: 18th Nov 2016
  • Decisions
  • 1 Associated documents
This is our decision on project eligibility as part of our cap and floor regime for electricity interconnector applicants from the second window.

  • Published: 16th Nov 2016
  • Decisions
  • 11 Associated documents
Decision to amend various licences to implement the cap and floor regime and use of revenues compliance.

  • Published: 7th Nov 2016
  • Guidance
  • 0 Associated documents
An update regarding the second application window for the cap and floor regime, which closed on 31 October 2016.

  • Published: 18th Oct 2016
  • Decisions
  • 4 Associated documents
This document contains the approval of BritNed’s access rules for 2016.

  • Published: 18th Oct 2016
  • Decisions
  • 5 Associated documents
This document contains the approval of England-France Interconnector (IFA) access rules for 2016.

  • Published: 18th Oct 2016
  • Closed: 15th Nov 2016
  • Consultations & responses, Press releases
  • 5 Associated documents
The cap and floor regime is the regulated route for interconnector development in GB. This consultation provides our minded-to position on the Final Project Assessment (FPA) of the NSL interconnector.

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