Ofgem has granted an updated UK Interconnector Licence for the NeuConnect interconnector between the UK and Germany.
NeuConnect was first awarded an interconnector licence in 2018 but it was necessary for the project to seek variations to Ofgem’s existing Cap and Floor regulations.
In May 2020, Ofgem approved changes to the existing Cap and Floor regulations to enable the delivery of project-financed schemes. In line with this, NeuConnect’s UK Interconnector Licence has now been updated to include these changes.
NeuConnect is a privately-financed £1.4 billion interconnector that will create the first direct link between UK and German electricity networks, connecting two of Europe’s largest energy markets for the first time.
Over 700 kilometres of subsea cables will allow 1.4 GW of electricity to flow in either direction.
The project is now targeting reaching financial close this year, allowing major construction work on the new link to begin in 2022.
“Securing an updated UK interconnector licence by Ofgem is another important milestone in the delivery of this vital new energy link ,” said NeuConnect CEO Christophe Vanhove.
“With all major planning and procurement processes finished or nearing completion, NeuConnect continues to make strong progress as we target reaching financial close this year and the start of construction in 2022.”
NeuConnect has so far secured the planning approval for UK onshore works, which allows the construction of a converter station and onshore cabling works at the Isle of Grain in Kent.
In addition, a £1 billion procurement is programme nearing completion, with major contract awards expected in the next few months.
The interconnector is being developed by a consortium that includes Meridiam, Allianz Capital Partners and Kansai Electric Power, with the project also supported by Greenage Power and Frontier Power as developers.