Regarding the development progress of GridLink, we are pleased to report that on 19 June 2017 Ofgem announced its preliminary decision to approve GridLink for acceptance under the Cap and Floor regime. This decision is now subject to consultation and a final decision will be made in September 2017. In its decision, Ofgem stated:
“The case for GridLink is primarily driven by the high proportion of nuclear in the French energy mix as well as a growing proportion of renewables, which drives lower wholesale prices in France. This can provide security of supply benefits by diversifying energy resources in GB. The lower wholesale prices in France are generally expected to drive imports to GB, which would lower GB wholesale prices. Differences in policy and time zone create further arbitrage opportunities. Ofgem analysis shows significant consumer welfare benefits net of all associated project costs. GridLink also demonstrates net benefits for system operation.”
This preliminary regulatory approval is an important milestone in the development of the project. In parallel, GridLink is in discussions with the French transmission system operator (RTE) regarding its participation in the project. These developments follow the significant progress made in the last 9 months during which GridLink has obtained an interconnector licence from Ofgem and signed grid connection agreements with National Grid and RTE (for grid connection in UK and France respectively). The full Ofgem consultation paper can be found here.