A new £500 million interconnector that will allow the transfer of electricity between Belgium and Britain has been given the go-ahead by Ofgem.
Called Project Nemo, it is expected to bring an extra 1GW of electricity capacity to the UK when completed in 2019.
It will run between Zeebrugge in Belgium and Richborough in Kent and will also be the first interconnector built under Ofgem’s proposed “cap and floor” regime.
Under the framework, Ofgem will place a cap on the developer’s earnings and the amount above it will be returned to consumers. However, it the revenue falls below the amount, then consumers will top it up to the confirmed level.
For Project Nemo, the annual revenue floor has been set at £50.4 million over the 25-year duration of the regime and the annual revenue cap at £80 million.
Energy Secretary Ed Davey said the project is a “major landmark” to boost interconnection with neighbouring countries while improving energy security and lowering bills.
He added: “By linking us to Belgium, Project Nemo will enable enough electricity to flow between our countries to power up to three million homes. The new cap and floor regime will unlock billions of pounds of investment in interconnectors.”