Aquind: Set-back for controversial interconnector project Ofgem decision
Aquind has said it is disappointed after Ofgem rejected its request for a cap and floor funding scheme – which helps attract investment for interconnector projects.
The controversial Aquind project, if approved, aims to lay electricity cables between Normandy in France and Lovedean in Hampshire, passing through the eastern side of Portsmouth.
The company applied to be included in Ofgem’s cap and floor scheme which helps attract investment to increase interconnector capacity, but after reviewing Aquind’s proposal, Ofgem decided the project posed too many risks.
In its decision report, the energy regulator said: “We are concerned about the potential negative effect this project has on the system.”
It added that the project would create “disproportionate” costs and “represents a risk to consumers if it were to materialise”. It also said that Aquind had not demonstrated the project could be completed by 2032.
An Aquind spokesperson said the company was “disappointed” by the decision, arguing the project could strengthen the UK’s energy security.
“This decision stands in contrast to AQUIND’s capacity to reinforce the resilience of the UK’s energy infrastructure at a time when a stable supply is crucial,” they said.
The company said it was the only project in Ofgem’s latest review that could cut carbon emissions by millions of tonnes, and that its benefits included cheaper energy and more grid flexibility.
Aquind also criticised Ofgem’s decision, saying it didn’t reflect the reality of rising electricity costs, especially in southern England.
Aquind plans to explore its next steps, saying it is committed to seeing the project through. “We will explore every viable avenue to ensure this critical interconnector project reaches completion,” the spokesperson added.
The company also called for further talks with Ofgem to address the concerns raised, saying it remains confident the project’s long-term value will be recognised.
Ofgem’s decision is a major setback for the project, which has faced widespread criticism from local residents, politicians and environmental groups. The final decision will be made by Ed Miliband, the government’s energy secretary who in 2022, congratulated the project’s initial refusal.