The regulation of future electricity interconnection: Proposal to roll out a cap and floor regime to near-term projects

Publication date
23rd May 2014
Closing date
18th July 2014
Policy area
Status

Electricity interconnectors have potentially significant benefits for consumers, yet only a limited number of interconnectors have been built under the current regulatory framework. We have been evaluating and consulting on alternative regulatory options that would facilitate investment in interconnection where that is in consumers’ interests.

This consultation sets out our proposal for there to be a new regulatory approach available - the 'cap and floor’. Under this approach developers will identify, propose and build interconnectors and there will be a cap and floor mechanism to regulate how much money a developer can earn.

It builds on the work to date for the proposed new interconnector to Belgium (the Nemo project). It also builds on our work on the planning and delivery of interconnectors as part of the Integrated Transmission Planning and Regulation (ITPR) project.

We propose to roll out a cap and floor regime to near-term interconnection projects and open an initial window for cap and floor applications. We are asking for input on the proposed regime design and regulatory assessment framework. In particular, we invite comments on the eligibility criteria, approach to cost assessment, application process and timing.

This consultation is now closed.