World’s longest subsea electricity interconnector to boost cheaper supplies

Press release

Publication date

Industry sector

  • Transmission Network
  • Generation and Wholesale Market

Energy regulator Ofgem has set maximum and minimum revenues for the Viking Link project, a 1.4GW connection from Lincolnshire to Denmark that will likely see £5.2 billion in consumer benefits over 25 years.

The Viking Link project is one of several new interconnectors that have been proposed to link Great Britain with neighbouring countries.

Akshay Kaul, Networks Director at Ofgem said: “Interconnectors boost competition and increase security of supply by allowing us to import from a wider, deeper and cheaper pool of electricity available in neighbouring countries. Ofgem regulates interconnector revenues, making them attractive to investors while encouraging competition from a more diverse range of market participants.”

In its cap and floor scheme, Ofgem sets the cap on the maximum revenue a developer can earn and a floor for the minimum. If developers do not make enough from charges to use the link, their revenue will be ‘topped up’ to the floor level. The top-up funds ultimately come from small increases to the high voltage grid charges consumers pay as part of bills. Excess revenue above the cap is paid out to customers through small reductions in these charges.

Today, Ofgem has published its Final Project Assessment for the Viking Link project, setting a provisional cap level of £111.5 million per year and floor level of £61.7 million per year. These levels are lower than those in Ofgem’s initial assessment (which were a cap of approximately £115.2 million and floor of £66.5 million). The decrease reflects a combination of our decisions on allowed costs and cost savings against the forecasts made by the developers.

Notes to editors

  1. See more information about interconnectors and the cap and floor regime.
  2. Prices are 2019/20.

For further press information

For media, contact:

James Hotson: 020 7901 7148

Media out of hours mobile: 07928 829894 (media calls only)

General enquiries (non-media)

If you are an energy customer looking for help and advice, including complaints about energy firms, please see our Household gas and electricity guide. Citizens Advice also provide a free, impartial helpline service across a range of issues on 0808 223 1133.

We also regularly share news and post general advice to help consumers get the most out of their energy services via our @Ofgem twitter and Facebook pages. If you have an enquiry or complaint relating to Ofgem’s policies or functions, contact us at consumeraffairs@ofgem.gov.uk or on 020 7901 7295.

For all other non-media related enquiries, please visit our Contact us page.

About Ofgem

Ofgem is Britain’s independent energy regulator. Our role is to protect consumers now and in the future by working to deliver a greener, fairer energy system. We do this by:

  • Working with Government, industry and consumer groups to deliver a net zero economy at the lowest cost to consumers.
  • Stamping out sharp and bad practice, ensuring fair treatment for all consumers, especially the vulnerable.
  • Enabling competition and innovation, which drives down prices and results in new products and services for consumers.

For facts, figures and information about Ofgem’s work, see Energy facts and figures or visit the Ofgem Data Portal.

For energy insights and updates straight to your inbox from Ofgem, please subscribe.

Follow us on Twitter @ofgemLinkedIn and Facebook.