Interest During Construction for Offshore Transmission applying in the financial year 2016/17
Decision
Publication date
Industry sector
- Offshore Transmission Network
- Transmission Network
About the IDC update
In December 2013, we committed to annual reviews of the IDC cap to reflect current market conditions, with the previous capped rate being set at 8.00% for the 2015/16 financial year.
We have updated the data as per our annual review on 31 August 2015, publishing a consultation in December 2015, seeking stakeholder views on this review. We have used the same methodology as was used last year and updated all inputs. The detailed calculation with breakdown of parameters, together with a chart showing the impact of the movement of each parameter is provided in the Annex to this letter.
Outcome
We are comfortable that our established methodology continues to act as an effective proxy when setting a cap on interest during construction but will continue to keep this under review. All stakeholder input have been noted by Ofgem and we thank responders for taking the time to respond to this consultation. Further detail can be found within the letter. We therefore determine that the IDC cap rate for 2016/17 is 7.44%.