Interconnectors deliver billions in benefits to Brits
- New analysis finds the net consumer benefit of interconnectors since 2023 is £1.65bn.
- Interconnectors are benefiting Great Britain, with 86 TWh of lower cost, reliable imports - equivalent to powering 10m households over three years.
National Grid’s subsea electricity interconnector portfolio, the largest in the world, has delivered over £1.65bn of benefit for GB consumers since 2023, compared to if the portfolio was replaced with traditional gas generation. This analysis demonstrates the crucial role interconnectors play in lowering energy bills and ensuring security in our energy supply by maximising every available electricity source.
Interconnectors are overwhelmingly benefiting Great Britain.
The National Energy System Operator can use the flexibility of interconnectors to import or export to help lower energy bills. By benefitting from different time zones, variations in energy demand, and importing surplus energy from the continent at a lower cost, interconnectors are reducing the number of price spikes which Great Britain faces. However, this import focused trend is set to change in the 2030s. With increasing amounts of renewable generation in Great Britain, the nation is expected to become a net electricity exporter. This change will reduce the curtailment costs of wind power and reduces energy bills for consumers.
Interconnectors are therefore critical to a more secure and affordable energy future. The strong performance of our interconnectors has seen over £300 million in payments to GB consumers since 2023, under the Cap and Floor regulatory regime.
Interconnectors enhance Britain’s energy security.
Interconnectors provide the System Operators with access to more electricity sources in times of need. As Great Britain continues to invest to deliver an affordable, more resilient and cleaner energy system, interconnectors remain a vital part of a diverse energy mix. Interconnectors are supporting the delivery of the Government’s Clean Power target with more than two-thirds of our imports zero-carbon since 2023. This will only increase as more renewables across Great Britain and Europe are developed.
By forming links between Great Britain and its European neighbours, they enable flexible access to electricity from the broader EU energy system – delivering a reduction in Great Britain’s wholesale prices, compared to operating traditional gas generation. The proposals for a closer relationship between the UK-EU are positive for the management of the energy system and is good news for British households and businesses.
Ben Wilson, President of National Grid Ventures said:
“Diversity of supply enhances energy security and by linking Great Britain to five other markets, National Grid provides access to a broader mix of energy sources. With different energy systems that have different patterns of customer demand, we’re able to complement one another and share lower cost, abundant power. Interconnectors have lowered electricity prices for Great Britain consumers by enabling this cooperation, ensuring that energy isn’t wasted. With more renewable energy production and interconnector projects coming online, this mutual benefit is set to continue and increase over the next 10 years as we are forecast to become an electricity exporter.”
Notes to editors
- This is internal analysis which uses a model to run a scenario where interconnectors were replaced by CCGT power plants. The model estimates the marginal cost of CCGT for each hour using a combination of gas, carbon, and variable fixed costs. The model takes existing EPEX and NordPool auction data and combines the bid curves. This is then used to simulate auctions in this counterfactual scenario, using historic demand data from NESO2 to determine price. Whenever interconnectors are importing, flow volumes are treated as supply, which is then replaced with an equivalent supply bid in the bid curve at the calculated CCGT marginal price. Conversely when exporting, flow volumes are removed from the demand volume. The monetary change in price is multiplied by the volume demand over that period, and summed for each period to give a single annual value.
- The latest Cap and Floor Payments figures were published in our Annual Report and Accounts 2024/25.