In August 2020, Ofgem launched a review of its regulatory policy and approach to new electricity interconnectors. The objectives of the review are two-fold: firstly, to establish whether there is a need for further GB interconnection capacity beyond those projects currently with regulatory approval; and secondly, to consider Ofgem’s approach to the regulation of future GB interconnection. The review has been broken down into four workstreams considering specific aspects of regulatory policy and decision-making. This working paper consultation is for Workstream 1 review. We also published our working paper for Workstream 2 today and will publish Workstreams 3 and 4 in the coming weeks.
The first working paper summarises our analysis, findings, and provisional recommendations from Workstream 1 – a review of the cap and floor regime to date. In this workstream we have looked back at whether the objectives of the cap and floor regime have been met. We have also considered the effectiveness of the regime in meeting those objectives, and considered changes or alternatives that might help us to better deliver those objectives in future. This includes the regulatory design of the cap and floor regime and the structure of our current assessment framework.
We are now seeking stakeholder feedback on our analysis, proposed conclusions and initial proposals set out in this public consultation. We will then consolidate the findings across each workstream into a single decision paper, which will provide our final proposals for the future regulation of interconnectors in GB.