Three more interconnectors to benefit from guaranteed return

Ofgem is proposing that three more interconnectors benefit from its ‘cap and floor’ regime, under which consumers underwrite the project and profits are capped.

The three projects, which together could add 4.2GW of new connection between GB and Europe, are GridLink, NeuConnect and NorthConnect. They were all the new projects put forward during Ofgem’s second ‘window’ for interconnector proposals.

  • GridLink is a 1.4GW interconnector between Kingsnorth and Warrand, France. The project is owned by iCON Infrastructure Partners lll, LLP and is being developed by Elan Energy GB Limited. Ofgem said the differences between the French and GB energy system are related to policy, capacity mix, and time differences. Interconnection to France benefits from the short distance to GB and therefore relatively low capex requirements.
  • NeuConnect is a  1.4GW interconnector between Grain and Germany and it is being developed by a consortium  of Frontier Power, Meridiam and Greenage Power. Ofgem said Germany’s  PV and wind capacity had led to low wholesale prices, some of which are curtailed due to network constraints in Germany. Daylight timing differentials and the sweep of east-west weather patterns drive further benefits from interconnection to Germany.
  • NorthConnect project is a 1.4GW interconnector between Peterhead and Sima, Norway, being developed by NorthConnect KS, a consortium consisting of NorthConnect, Lyse Produksjon, E-CO Energi, Vattenfall  and Agder Energi. Ofgem said Norway’s flexible  hydropower complements wind energy and would providing a secure, cheaper and dispatchable source of electricity.

Ofgem asked for responses to its consultation by 14 August.

Further reading:

National Grid’s French interconnector profits drop 41% year on year

Three new interconnectors to be allowed ‘cap and floor’ guaranteed return

Removing carbon price floor would reduce imported energy by 39%, report finds

Norway interconnector could cost a third less than early estimate

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