National Grid is to be guaranteed a minimum of £1.3bn income for building the world’s longest subsea power cable to import electricity from Norway. Energy regulator Ofgem on Tuesday announced plans for consumers to guarantee the utility giant at least £53m annual revenues for 25 years in return for its 50pc investment in the £1.4bn North Sea Link interconnector. The 450-mile cable from Blyth in Northumberland to Kvilldal in Norway is due to be built by 2021 and will be the first electricity link between the two countries. It will be able to import or export up to 1.4 gigawatts (GW) of electricity – enough to power about three quarters of a million UK homes. Interconnector owners make their income by selling companies access to their cable to trade power. However, Ofgem is keen to encourage investment in the cables and has introduced a “cap and floor” regime guaranteeing developers a minimum income, backed up by consumer subsidies if needed, while also limiting their total revenues. Ofgem said the minimum £1.3bn revenue that National Grid would be guaranteed by consumers compared with estimated benefits to consumers of £3.5bn by accessing cheaper power from Norway.
Telegraph 18th Oct 2016 read more »