Ofgem rejects Interconnector UK’s charging modifications

The modifications to the charging method and access rules proposed by Interconnector UK (IUK) have been rejected by Ofgem. IUK is a Transmission System Operator (TSO) and holder of a […]

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By Priyanka Shrestha

The modifications to the charging method and access rules proposed by Interconnector UK (IUK) have been rejected by Ofgem.

IUK is a Transmission System Operator (TSO) and holder of a gas interconnector licence.

It operates a gas interconnector through which gas flows in both directions between the UK and continental European energy markets via Belgium.

In October last year, IUK launched a consultation on the modifications to its charging methodology and access rules to enable it to offer two new services.

One was offering a service whereby shippers can release a portion of annual IUK capacity they hold back to the TSO. The shipper would not be obliged to pay for capacity returned to IUK in this manner and the capacity would be made available to the market at the next auction.

It also proposed to offer a service where a shipper holding capacity at one of IUK’s two interconnection points could pay a fee to have equivalent rights to flow gas at the other IUK interconnection point.

Ofgem said it has decided not to approve both proposals as it is “not satisfied” they meet the objectives required under IUK’s licence.