Ofgem invited bids to bring forward “billions of pounds of investment” in new electricity interconnectors on Monday, in a bid to boost energy security, hit the UK’s climate goals, and save money for energy consumers.
The energy regulator said it would hold a third investment round next year to build new subsea cables, or interconnectors, which can import cheaper clean energy when needed and export surplus power to neighbouring countries.
Britain currently has seven operational electricity interconnectors to Ireland, France, Belgium, the Netherlands and Norway, providing almost 7% of the UK’s electricity last year.
The government said it wanted to “more than double” existing interconnector capacity by 2030, to support its target of quadrupling offshore wind capacity by the same date.
To help meet that target, next year’s investment round would favour projects able to complete by 2030, Ofgem said.
It explained that project developers and consumers would benefit from its ‘cap and floor’ regime, which sets a maximum ‘cap’ on revenues and a minimum ‘floor’ to ensure an adequate return for investors while keeping costs down for consumers.
The energy regulator said it would also run a pilot cap and floor scheme for the first-time inviting bids for ‘multiple-purpose interconnectors’, which can link up clusters of offshore wind farms directly to an interconnector.
That, it said, meant when wind was blowing in the North Sea, the offshore wind farms could export surplus electricity to both Great Britain and Europe.
“Greater interconnection of energy across borders is vital to ensure resilience, affordability and sustainability in the future as we transform our energy system,” said the regulator’s director of networks, Akshay Kaul.
“Our next investment round for interconnectors will bring forward the investment we need, creating green jobs and unleashing the full potential of the UK’s world leading offshore wind industry, while also protecting customers by capping costs.”
