Electrical interconnectors linking Britain with our neighbours will be critical in a net zero electricity system.
They will enable renewable generation across the country by ensuring a market for an increasing fraction of
their generation. Interconnectors will also be essential to ensure a secure supply of electricity, something
that will become increasingly important as we electrify transport, heat and industrial energy demand.
The Review of Electricity Market Arrangements (REMA) has highlighted that it is important we have
effective ways of influencing the dispatch or redispatch of interconnectors based on their location to help
align their flows with the limits of our transmission network. And the growing importance of strategic
spatial planning, illustrated by the recent Clean Power 2030 advice from the National Energy System
Operator (NESO), shows that we will increasingly need to coordinate the development of new
interconnectors, investment in the transmission network, and the expansion of other national energy
infrastructure.
This report highlights five areas of focus for the REMA debate when considering interconnectors, and
makes five recommendations for how we should develop arrangements for interconnectors as part of any
energy market reform, as part of our engagement with stakeholders in neighbouring markets, and as part of
our development of strategic planning processes.
Areas of focus for market reform discussion
- A focus on value as well as costs ensuring our discussion of interconnectors focuses on the
significant benefits that interconnectors provide as well as the costs they can create. - A focus on long-term strategic system planning ensuring interconnection, including Offshore
Hybrid Assets (OHAs) which provide both cross-border interconnection and the connection of
offshore wind farms, is embedded within our developing strategic spatial planning processes. - A focus on optionality reflecting that interconnectors provide significant ‘option value’ to the GB
system. - A focus on operation ensuring we find pragmatic ways to improve processes for aligning
interconnector flows with internal GB transmission constraints. - A focus on cooperation and collaboration working with connected markets to ensure
interconnectors deliver mutual benefits to stakeholders at both ends.
Recommendations for improving the locational planning and operation of interconnectors
- Recommendation 1: Improve locational investment signals through a strategic plan for
interconnectors - Recommendation 2: Improve locational dispatch through coordinated approaches with
connected system operators in line with examples happening in Europe - Recommendation 3: Ensure GB forward-trading evolves to align with European market
developments - Recommendation 4: Co-develop solutions with interconnected countries
- Recommendation 5: Prioritise reintegration into the Internal Energy Market