- Publication date
- 17th July 2017
- Information type
- Policy area
The cap and floor regime is the regulated route for interconnector development in GB. There are two main stages to our cap and floor regime – the Initial and Final Project Assessments (IPA and FPA). In October 2016 we consulted on our minded-to position on the FPA of the NSL interconnector.
The NSL project is being jointly developed by National Grid Interconnector Holdings (NGIH) and by Statnett, the Norwegian transmission system operator. It will be a 1.4GW interconnector between Blyth, Northumberland in England and Kvilldal in Norway. Our cap and floor regulatory regime applies to National Grid’s 50% share of the cost and revenues of the project.
As part of the FPA process, we conducted a cost assessment of the NSL 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 as well as the financial parameters that apply to the NSL project.
This letter is our decision on the Final Project Assessment of the NSL interconnector. This sets the provisional cap and floor levels at £89.85m and £50.90m. We will modify NSL’s interconnector licence to give effect to our decision. We will then confirm the final cap and floor levels for the project prior to operation at our post-construction review (PCR) stage.