Decision for the market arrangements regime for Multi-Purpose Interconnectors

In June 2023 we consulted on market arrangements for Multi‑Purpose Interconnectors (MPIs), seeking views on the relative merits of the Home Market (HM) and Offshore Bidding Zone (OBZ) configurations, and on the trading arrangements required to support efficient cross‑border operation of future MPI projects. We received twenty-two responses from offshore wind and transmission developers, system operators, trading parties and other stakeholders. A summary of responses was published in December 2023.  

Following detailed assessment and further engagement, the Government and Ofgem are pursuing Offshore Bidding Zones (OBZs) under implicit trading arrangements as the preferred market model for MPIs. Stakeholders expressed strong support for this approach, citing improved market efficiency, reduced adverse flows, and better integration of offshore renewables compared to HM alternatives.  

Stakeholders also noted implementation challenges, including revenue risks for offshore wind farms, compatibility with the Contracts for Difference (CfD) scheme, and the need for clear curtailment, balancing and operability arrangements. We recognise these issues and will continue to develop the wider regulatory framework for MPIs.  

We remain engaged with the European Commission on future UK‑EU trading arrangements in all timeframes, as set out in the 2025 UK‑EU Common Understanding, and will provide updates on these developments as work progresses.