UK-Norway interconnector projects paused due to timeline conflict

Two multi-purpose interconnector projects that were supposed to link the UK and Norway have been deemed unable to meet the eligibility criteria and have therefore been paused, according to UK energy market regulator Ofgem.

Following discussions between the relevant UK and Norwegian authorities, current indications are that the UK Multi-Purpose Interconnectors (MPI) Pilot scheme’s development timeline is unlikely to align with Norway’s timelines for MPI development.

Consequently, Ofgem announced it was unable to consider the two projects connecting to Norway as having met the eligibility criteria of its MPI Pilot scheme.

However, UK authorities will continue collaborating with relevant Norwegian authorities on interconnection and the respective nations’ energy security and transition to net zero.

While the timelines on near-term MPI development appear incompatible, the relevant UK authorities are engaging with relevant Norwegian authorities on a regular basis to understand the future landscape for MPIs in Norway. Ofgem will welcome applications to Norway in any future MPI application window.”

In the application window for the MPI pilot, open from 1 September until 31 October 2022, Ofgem received four pilot scheme applications, and on 15 December 2022, announced that it would take forward two projects to the pilot scheme and pause making a decision on the others.

Meanwhile, the decision for the remaining two projects, both proposing to connect to Norway, was paused until this spring to await further clarity from the Norwegian authorities on their position in respect of near-term MPI development to Norway.

According to Ofgem, this was deemed important insight to inform the plans for regulatory approval in the connecting country, a requirement for MPI Pilot applicants, to make them sufficient enough to meet the UK eligibility criteria.

The two MPI pilot projects previously confirmed as eligible, Eurolink to the Netherlands and Nautilus to Belgium, in the coming months will undergo a needs case assessment to ensure that only projects that are likely to be in the interest of GB consumers are awarded a cap and floor regime in principle.

Meanwhile, the UK regulator said it was continuing to develop the MPI Pilot Regulatory Framework and engaging with industry through the MPI Framework Discussion Group (MFDG), which is set to help inform the coming consultation on the MPI regime. The plan is to consult on the Initial Project Assessment decision later this year.

To remind, at the end of February Ofgem announced its decision that all electricity interconnector projects that had submitted applications in its third cap and floor window would progress to the next phase.

This third window was opened for electricity interconnectors able to start operations before the end of 2032 and the application period ran from 1 September 2022 until 10 January 2023.