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FAB Link, IFA2 and Viking Link interconnectors awarded cap and floor Greenlink to be reviewed

By: Chris Anderson 21/07/2015 CA

General Grid Interconnectors

Ofgem has decided to grant the FAB Link, IFA2 and Viking Link interconnectors a cap and floor regime in principle and subject to no material escalation in the costs as submitted to us to date by the project developers.

This follows OFGEM's March 2015 consultation on their proposals.

OFGEM's March 2015 assessment demonstrated that FAB Link, IFA2 project and Viking Link are likely to provide significant net benefits for GB consumers.

The FAB Link project is a proposed 1.4GW interconnector between France and GB via the island of Alderney. It is being jointly developed by Transmission Investment and RTE, the French transmission system operator.

The IFA2 project is also planning to further connect the French and GB transmission systems. The project would have a capacity of 1GW and is being developed by National Grid Interconnector Holdings (NGIH) and RTE.

The Viking project is a proposed 1GW interconnector between GB and Denmark, developed by NGIH and Energinet.dk, the Danish transmission system operator.

OFGEM has now considered all of the consultation responses received (available on the OFGEM consultation page) and taken these into account in reaching their decision.

They believe that the three projects are likely to be in the interests of GB consumers and have therefore decided to grant these interconnectors a cap and floor regime in principle subject to a number of pre-defined conditions set out in the decision letter, and no material escalation in the costs as submitted to OFGEM to date by the project developers.

OFGEM will now expect the FAB Link, IFA2 and Viking Link developers to make their full FPA cost submission for each project within two years of the date of this decision.

Once received the FPA cost submission for each project OFGEM will consult on a detailed cost assessment and their decision will be used to set a provisional cap and floor.

The consultation back in March 2015 also sought views on the OFGEM position not to grant a cap and floor regime to the Greenlink project, a huge blow to the developer Element Power.

The Greenlink project is a proposed 500MW interconnector between GB and Ireland, being developed by Element Power.

OFGEM has stated that they will continue to review the detailed analysis submitted by Element Power and other relevant information submitted in consultation responses.
OFGEM plans to publish further information on this project soon.

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FAB Link, IFA2 and Viking Link interconnectors awarded cap and floor Greenlink to be reviewed

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