Ofgem has proposed to grant three interconnectors access to its ‘cap and floor’ financial regime.
Seven interconnector projects applied to join the regime in a recent application ‘window’. They were:
• Aminth (1.4GW to Denmark)
• Aquind (2GW to France)
• Cronos (1.4GW to Belgium)
• LirIC (0.7GW to Northern Ireland)
• MaresConnect (0.75GW to Republic of Ireland)
• NU-Link (1.2GW to the Netherlands)
• Tarchon (1.4GW to Germany)

In March in its initial appraisal the regulator considered that ony Tarchon provided sufficient consumer benefit to join the regime. But after consultation Ofgem has decided to extend entry to LirlC and MaresConnect, saying “These projects are likely to benefit consumers by importing cheap and clean Irish wind energy into GB, lowering emissions and domestic wholesale prices”. The three projects are all considered to be deliverable, as required, by the end of 2032.
Confirming rejections of other projects, Ofgem said it had deliverability concerns over Aminth and NU-Link, while Cronos had high constraint costs. Aquind had both high constraint costs and deliverability issues.
In the cap and floor regime a minimum level of revenue is provided by consumers if the generated interconnector revenues are lower than the floor level. Where the generated interconnector revenues are above the cap level, the developer pays back revenues in excess of the cap to consumers.
The regulator has also given a boost to two other projects that will link both to offshore generating plant and neighbouring countries. LionLink to the
Netherlands and Nautilus to Belgium are described as ‘Non-Standard Interconnectors’ (NSIs) and both are being developed by National Grid Ventures (NGV). Ofgem had initialled approved only LionLink but has now decoded both can be admitted to its pilot ‘offshore hybrid assets’ regime. This regime is based on the interconnector cap and floor regime,with variations to reflect the differing risks and characteristics of OHAs.