Consumers are likely to see greater benefits from the construction of the interconnector between the UK and Norway.
That’s because Ofgem has revised down provisional upper and lower levels for National Grid’s annual revenues by around 30%.
It means the grid operator’s revenues from the cable operations under the cap and floor regime will be lower, providing more benefits to consumers than previously expected.
The 650 kilometre-long interconnector will have a capacity of 1.4GW and is expected to be operating in 2021.
It is being developed by National Grid and Norwegian transmission system operator Statnett.
Ofgem’s new proposal sets the maximum revenues from the project at £94 million a year and the minimum revenues at £53 million a year – reduced from £140 million and £75 million respectively.
Dermot Nolan, Ofgem Chief Executive said: “Greater interconnection is good for GB security of supply as we can import from a wider, deeper and cheaper pool of electricity available in neighbouring countries.
“Ofgem’s cap and floor regime, which regulates interconnector revenues, is one of the reasons why so many new projects are being proposed as it encourages this investment. More interconnection also enables access to wider market areas and diverse market participants, which is good for competition.”
Interconnectors, energy storage and demand side response are among the topics to be discussed at Energy Live 2016. Cordi O’Hara, Director of UK System Operator at National Grid is one of the main speakers at the event. Get your tickets here.
There are limited free tickets for energy end users and university students.