UK regulator kicks off interconnector debate
British energy regulator Ofgem is consulting on possible changes to the regulatory framework for power interconnectors in order to encourage more activity in the sector.
"The overall aim of the policy is to maximise the efficient use of existing and planned interconnection by ensuring users can respond efficiently to price differentials," the regulator said.
It added that any mix of capacity products and levels of firmness should "provide for competition, market entry and an appropriate allocation of rights and responsibilities between market participants."
The British power system is currently physically connected to only two other European power markets, via the 450MW Moyle link between Scotland and Northern Ireland, and via the 2GW UK-France Interconnector. But several new interconnection projects between the UK and the continent are already planned.
The consultation document puts forward a number of proposals for the allocation of capacity on links between Britain and neighbouring power markets, such as the implementation of implicit capacity allocation models. The 1GW BritNed cable is required to have a mix of implicit and explicit allocated capacity as a condition of its third-party access exemption. This contrasts with existing UK interconnectors, which use a system of explicit capacity allocation.
Ofgem argued a "clear and predictable" regulatory framework is required to ensure appropriate levels of investment in interconnector capacity to meet demand. Increased interconnection would also contribute to security of supply by ensuring the power system cope is able to cope with an expected surge in intermittent wind generation, the regulator said (see EDEM 8 January 2010).
Ofgem plans to develop its thinking on the regulation of new interconnectors in conjunction with neighbouring regulators. These discussions may also lead to joint consultations on proposed models, it said.
The deadline for responses to the current consultation is 30 March. Ofgem will provide an update on proposed next steps by early this summer. RA
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