Energy Security Bill factsheet: Multi-purpose interconnectors
Updated 1 September 2023
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A study by National Grid ESO, as part of the BEIS-led Offshore Transmission Network Review, found that a more integrated approach to connecting offshore wind, including the use of multi-purpose interconnectors, could reduce consumer costs by £3-6 billion depending on how soon it can be implemented and could reduce the number of onshore ‘landing points’ by up to 50%.
Why are we legislating?
Multi-purpose interconnectors are subsea electricity cables that connect GB to neighbouring markets and also connect offshore generation to shore. Multi-purpose interconnectors are a new, innovative asset type and are therefore not defined in law and therefore currently not easily licensable by Great Britain’s energy regulator the Gas and Electricity Markets Authority (which exercises its functions via Ofgem).
By introducing multi-purpose interconnectors as a licensable activity, we are providing certainty to investors and developers, enabling them to make decisions regarding future multi-purpose interconnector projects.
Compared to conventional existing point-to-point interconnectors and separate radial connections for offshore wind, multi-purpose interconnectors combine these activities at lower cost, with less infrastructure, and with a reduced impact on the environment and local communities. Multi-purpose interconnectors also help us achieve our net zero target by integrating renewable energy onto the grid. Lastly, they contribute to GB security of supply, by providing access to a diverse pool of generation.
How the Bill will achieve this
This Bill will introduce a new legal definition for multi-purpose interconnectors into the Electricity Act 1989, alongside a new licensable activity of operating a multi-purpose interconnector. The Bill also introduces a power for the Secretary of State to introduce standard conditions for multi-purpose interconnectors.
FAQ
Do multi-purpose interconnectors cause disruption to coastal communities?
Multi-purpose interconnector projects reduce disruption to coastal areas by enabling a reduction in coastal ‘landing points’ - the point at which the offshore infrastructure meets the shore. This is a key feature of the department’s Offshore Transmission Network Review, which aims to mitigate damage to coastal areas by taking a holistic approach to how these projects are developed.
By coordinating interconnection and offshore generation, multi-purpose interconnectors can reduce the total number of onshore and offshore substations and length of cabling, thereby reducing operating cost and the total capital cost of installations.
Background
In the Energy White Paper published in December 2020, BEIS committed to “work with Ofgem, developers and our European partners to realise at least 18 GW of interconnector capacity by 2030”, over double the current capacity of 8.4 GW. As part of the British Energy Security Strategy, the UK Government recently unveiled ambitious targets to achieve 50 GW of offshore wind generation by 2030, including 5 GW of floating offshore wind.
The Offshore Transmission Network Review (OTNR) was established to address the barriers to increasing our offshore capacity and the integration into the GB grid. The OTNR aims to deliver a more coordinated approach to offshore wind development, with a view to finding the appropriate balance between environmental, social and economic costs.
The OTNR also considers how best to facilitate multi-purpose interconnectors, which offer benefits by combining market-to-market interconnection and generation, including offshore wind.
Further information
The following documents are relevant to the measures and can be read at the stated locations: