Interconnectors eligible for UK capacity market auction

UK: Operators of interconnection cables will be eligible to be entered in the 2015 capacity market auction, giving the UK greater access to wind and other renewable energy sources.

Interconnectors could supply back-up energy to the UK grid

The Department of Energy and Climate Change (Decc) said adding interconnection capacity to the market auction will increase competition, which should drive down costs.

Decc's capacity market auction is designed to ensure backup energy supply at times of high demand. In return for financial incentives, power producers will guarantee that energy is delivered when it is needed.

Interconnection capacity will be eligible for entry in Decc's second four-year ahead auction in 2015, which will secure supply for the winter of 2019/2020. Decc said each interconnector will bid for one-year contracts and compete alongside other providers.

According to energy regulator Ofgem, the UK currently has 3.5GW of interconnector capacity, with links to France, the Netherlands and the Republic of Ireland.

Plans for a proposed 700-kilometre high-voltage cable between the UK and Norway were approved by the government's Marine Management Organisation yesterday.

The first capacity market auction is due to take place this month, with 52GW of eligible capacity dominated by fossil fuels and nuclear. The winners will be announced in January for contracts to secure energy from 2018/2019.

The scheme is meant to be a temporary solution to secure energy supply for the end of the decade until a more integrated European market emerges.