Interconnector Policy Review - Decision
- Interconnector policy review: Working paper for Workstream 1 – review of the cap and floor regime
- Interconnector policy review: Working paper for Workstream 2 – socio-economic modelling
- Interconnector policy review: Working paper for Workstream 3 - wider impacts of interconnection
- Interconnector policy review: Working paper for Workstream 4 - multiple purpose interconnectors
In August 2020, we launched a review of our regulatory policy and approach to new electricity interconnectors. In summer 2021 we consulted on our provisional recommendations and proposals across the four workstreams of the review.
This paper provides our decisions on these workstreams sets out our vision for GB interconnector regulation in the future, and the changes that we will make to the cap and floor regime for future projects. Following our review of the consultation responses and additional evidence we have decided:
- In the near-term, we will open a cap and floor investment round in mid-2022. This will be a locationally targeted window for interconnectors that are able to connect by 2030. In the long-term, we want interconnector planning to be integrated within more strategic network planning processes, with outputs informing future investment rounds.
- We will also implement some changes to our cap and floor regime framework and design to ensure that it reflects the changing role of interconnectors in the energy system, it works equally for different market participants, and it continues to protect consumers’ interests.
- We will launch a pilot scheme for multiple-purpose interconnectors (MPIs) under an adjusted cap and floor regime, alongside our third cap and floor application window. We consider that MPIs could potentially deliver significant benefits and can contribute to the delivery of government policy objectives.
Following this decision, we will launch an implementation period where we will finalise the details of our decisions. We will continue to engage with stakeholders to ensure that they have opportunity to comment on the details of the regime that might impact them, and consult with them if appropriate.
We will then publish a final summary of our approach to near-term interconnector and MPI regulation and details of the future cap and floor regime before opening a new application window and a cap and floor pilot scheme for MPIs in mid-2022.