Skip to main content
News Regulation Supply

Ofgem to invite bids for billions of pounds of interconnectors in ‘cap and floor’ investment round

The North Sea Link (platform pictured) opened in October, adding 1.4GW of capacity. Image: National Grid.

The North Sea Link (platform pictured) opened in October, adding 1.4GW of capacity. Image: National Grid.

Regulator Ofgem has invited bids for new electricity interconnectors, in an effort to increase energy security in the UK.

It will hold a third investment round under its “cap and floor” revenue regime next year, to bring forward billions of pounds of interconnectors. This means a maximum cap on revenues will be set, alongside a minimum floor, to ensure both an adequate return for investors and that the cost is kept down for consumers.

At the moment, Britain has seven operational electricity interconnectors, connecting it to Ireland, France, Belgium, the Netherlands and Norway. Collectively these interconnectors provided almost 7% of the UK’s electricity last year.

In October, the world’s longest sub-sea interconnector – the North Sea Link – which connects Blyth in Northumberland and the Norwegian village of Kvilldal, near Stavanger, also started operation, increasing Britain’s interconnector capacity by 1400MW.

The North Sea Link led net interconnector imports to reach an instantaneous high of 5,847MW at 12:20pm on 20 August during a test run, according to EnAppSys. This marked a record high for Britain, providing a glimpse of the future.

It has brought the electricity interconnector capacity in Britain’s market up to 7.4GW, made up of:

Interconnector

Country

Capacity

IFA and IFA2

France

3GW

BritNed

The Netherlands

1GW

Nemo Link

Belgium

1GW

Moyle

Northern Ireland

500MW

East West

Republic of Ireland

500MW

North Sea Link

Norway

1.4GW

IFA is currently operating at reduced capacity following a fire at a convertor station in Sellindge in September, leading to 1GW going offline. Given the extent of the damage, National Grid expects to bring 500MW back to service from October 2022 through to May 2023, while the final 500MW isn’t estimated to come back online till October 2023.

The UK government is planning to more than double existing interconnector capacity by 2030 to support the targeted growth in its offshore wind capacity – with plans to quadruple it to 40GW by 2030.

As such, next year’s investment round will favour projects that are able to be completed by 2030.

Additionally, Ofgem will run a pilot cap and floor scheme inviting bids for “Multiple-purpose Interconnectors” (MPIs) for the first-time. These would be able to link up clusters of offshore windfarms directly to an interconnector.

“Greater interconnection of energy across borders is vital to ensure resilience, affordability and sustainability in the future as we transform our energy system,” Akshay Kaul, director of Networks at Ofgem, said.

“Our next investment round for interconnectors will bring forward the investment we need, creating green jobs and unleashing the full potential of the UK’s world leading offshore wind industry, while also protecting customers by capping costs.”

Loading...

End of content

No more pages to load