On Thursday, Ofgem shortlisted electricity interconnector projects totalling 7.5GW for its investment support regime.
The UK’s interconnection would increase by 7.5GW through a total investment of £6 billion as Ofgem gives the greenlight to all five applications, boosting their chances of moving forward.
Deemed eligible by Ofgem, the interconnector projects for the scheme include two projects linking the UK to France, countries which have an abundance of renewable and nuclear power; a link to Ireland where wind power is expected to exported; and from Denmark and Norway links to renewable energy.
Martin Crouch, Ofgem’s senior partner for transmission said “These five new projects, if approved and then built, could provide real benefits to consumers. They can help to lower electricity supply prices, lower the cost of delivering security of supply and support the decarbonisation of energy supplies,”.
National Grid which has partnered with Norway’s Statnett, Denmark’s Energinet.dk and French transmission operator RTE in developing plans for three of the five projects, in capacity totalling 3.4 GW.
Known as FAB, the second Anglo-French project will be developed by FAB Link and RTE; while the Irish interconnector will be developed by renewable generator Element Power.
Ofgem said over the summer that interconnectors which expect to begin operations by 2020 would be open the scheme, and as soon as 2016 some of those would begin construction if approved for the regime.
Certainty provided for interconnector developers by the so-called ‘cap-and-floor’ funding regime promising that if revenues fall below a pre-determined floor then consumers top up the developers’ revenues to the level of the floor. However if revenues go above the cap then the difference would be paid back to consumers.