UK gas and electricity markets regulator Ofgem has revised the revenue limits for GB-Norway interconnector developers in a bid to bring more benefits for the consumers.

Under its cap and floor scheme, the watchdog has capped the maximum revenue at $94m per year for a developer of the 1.4GW NSL electricity interconnector between Northumberland and Norway.

It has proposed a floor level of £53m per year.

Ofgem Chief Executive Dermot Nolan said: “Greater interconnection is good for GB security of supply as we can import from a wider, deeper and cheaper pool of electricity available in neighbouring countries.

“Ofgem’s cap and floor regime, which regulates interconnector revenues, is one of the reasons why so many new projects are being proposed, as it encourages this investment. More interconnection also enables access to wider market areas and diverse market participants, which is good for competition.”

The move comes in the wake of developers cutting construction costs of the link.

Initially, the regulator proposed a maximum revenue limit of £140m for the developers, while the minimum was fixed at £75m.

Ofgem said: “Developers have a strong incentive to do this as the cap and floor regime encourages commercial behaviour, including reducing costs where possible.”

The additional revenue above the cap is paid out to customers through small reductions in these charges.

Being developed by National Grid and the Norwegian transmission system operator Statnett, the 720 km interconnector is expected to become operational by 2021.

NSL will connect the electricity systems of the two countries via a subsea cable, enabling the UK and Norway to trade power.