Decision on Interest During Construction for Offshore Transmission and interconnectors granted the cap and floor regime to apply during 2017/18
Decision
- Publication date
- Industry sector
- Offshore Transmission Network
- Transmission Network
We published our consultation on 21 December 2016. We received three responses to the consultation. This letter serves to summarise those responses and to set out the decisions we have reached.
We proposed to move to annual updates of IDC for electricity interconnectors and to align the calculation inputs with those for the OFTO IDC. This would have involved changing the timing of setting interconnector IDCs from individual assessments at the date of FID for each project to an annual update applicable to all projects reaching FID in that year.
Following our analysis of the three responses we have decided to do the following:
- For OFTOs: to apply the IDC rates as set out in our minded-to position. That is to set capped rates of IDC for the 2017-18 financial year (April 2017 to March 2018) at 6.83% (pre-tax, nominal).
- For interconnectors having already received an IPA decision by Ofgem (Window 1 projects) we will continue to assess IDC, individually, at the date of FID.
- For cap and floor interconnector projects which have yet to be approved (Window 2 projects) we will present our conclusions as part of our window 2 Initial Project Assessment Consultation, which we are aiming to publish in the middle of June 2017.