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Consultation launched on subsea link between UK and Norway

Ofgem has launched a consultation on proposals to approve the case for awarding a cap and floor regulatory regime to the NSN interconnector project.

The project, which is expected to be operational in 2020, will link the British and Norwegian electricity systems via a 700km subsea cable, allowing the two countries to trade power.

The consultation follows Ofgem’s assessment of the consumer benefits the project is expected to deliver, which include: more competition in the wholesale electricity market and lower wholesale prices; a more varied and secure supply of electricity; and increased access to renewable sources of energy at a lower cost.

The benefits of the project are described in the initial project assessment.

Development costs, design specifications and tendering arrangements are being analysed to ensure that these deliver good value for consumers, and Ofgem will consult on detailed cost assessments later this year before setting provisional cap and floor levels for NSN’s future revenues.

Chief executive Dermot Nolan said: “Our goal is to encourage new investment in interconnectors that will make energy supplies more secure and increase competition in the market, to the ultimate benefit of households and businesses.

“Our consultation sets out our analysis and evidence base and seeks views from all stakeholders. We expect to make a decision on the justification for the investment in March.”

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