Bidding opening for subsea electricity interconnectors

The energy regulator, Ofgem, has announced its plans to invite bids for billions of pounds of investment in new subsea electricity interconnectors between mainland Great Britain and its European neighbours.

Currently, the UK has seven operational electricity interconnectors with 7.4 GW of capacity, connecting it to Ireland, France, Belgium, the Netherlands, and Norway, providing almost 7% of the UK’s electricity last year.

The Government wants to more than double existing interconnector capacity by 2030 to support its target of quadrupling offshore wind capacity by the same date.

The National Grid is also proposing two more interconnectors; Nautilus, a 1.4GW link with Belgium, and Eurolink, a 1,400MW transmission cable from the Netherlands to the UK.

Two previous rounds in 2014 and 2016 attracted investment for nine projects and seven more interconnector projects are expected to be operational by 2025.

Three of them will link to France, whilst a further four interconnectors will link to Denmark, Ireland, Germany and Norway.

Ofgem is also run a pilot cap and floor scheme for the first-time inviting bids for Multiple-purpose Interconnectors (MPIs) which can link up clusters of offshore wind farms directly to an interconnector.

This means when the wind is blowing in the North Sea, these offshore wind farms can export surplus electricity to both the UK and Europe.

The ‘cap and floor’ regime allows companies to propose and construct interconnectors with regulatory approval.

The 25-year cap establishes how much money a company can make, in order to protect consumers from fluctuating commodity prices, whilst the floor gives developers a guaranteed minimum rate of investment return thereby providing income certainty to a project’s investors.

Ofgem has not specified that the new interconnectors must link to any specific place or country, but may do so later.

Photo by Laszlo Kiss on Unsplash