Ofgem Decision on Market Arrangements for Multi-Purpose Interconnectors

UK Ofgem Publications & Decisions

Published March 13th, 2026

Detected March 13th, 2026

Summary

Ofgem has decided to implement Offshore Bidding Zones (OBZs) with implicit trading arrangements as the preferred market model for Multi-Purpose Interconnectors (MPIs). This decision follows a consultation on market arrangements and aims to improve market efficiency and integrate offshore renewables. Further development of the regulatory framework is ongoing.

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What changed

Ofgem, in conjunction with the Government, has published its decision to adopt Offshore Bidding Zones (OBZs) with implicit trading arrangements as the preferred market model for Multi-Purpose Interconnectors (MPIs). This decision, following a June 2023 consultation, aims to enhance market efficiency, reduce adverse flows, and improve the integration of offshore renewables. The decision acknowledges implementation challenges such as revenue risks for offshore wind farms and compatibility with the Contracts for Difference (CfD) scheme, indicating that the wider regulatory framework for MPIs will continue to be developed.

Regulated entities, particularly those involved in offshore wind and transmission development, should be aware of this shift towards OBZs. While the decision is made, the practical implementation details and the resolution of associated challenges are still under development. Companies should monitor Ofgem's ongoing work on the regulatory framework, including curtailment, balancing, and operability arrangements, as well as future UK-EU trading arrangements. No immediate compliance deadline is specified, but proactive engagement with Ofgem's developing framework is advisable.

What to do next

Monitor Ofgem's ongoing development of the regulatory framework for MPIs, including curtailment, balancing, and operability arrangements.
Stay informed about developments regarding UK-EU trading arrangements for MPIs.

Source document (simplified)

Decision for the market arrangements regime for Multi-Purpose Interconnectors

Publication date:

13 March 2026

Topic: Offshore electricity transmission, Electricity interconnectors Decision for: Consultation on the Regulatory Framework, including Market Arrangements, for Offshore Hybrid Assets: Multi-Purpose Interconnectors and Non-Standard Interconnectors Print this page

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In June 2023 we consulted on market arrangements for Multi‑Purpose Interconnectors (MPIs), seeking views on the relative merits of the Home Market (HM) and Offshore Bidding Zone (OBZ) configurations, and on the trading arrangements required to support efficient cross‑border operation of future MPI projects. We received twenty-two responses from offshore wind and transmission developers, system operators, trading parties and other stakeholders. A summary of responses was published in December 2023.

Following detailed assessment and further engagement, the Government and Ofgem are pursuing Offshore Bidding Zones (OBZs) under implicit trading arrangements as the preferred market model for MPIs. Stakeholders expressed strong support for this approach, citing improved market efficiency, reduced adverse flows, and better integration of offshore renewables compared to HM alternatives.

Stakeholders also noted implementation challenges, including revenue risks for offshore wind farms, compatibility with the Contracts for Difference (CfD) scheme, and the need for clear curtailment, balancing and operability arrangements. We recognise these issues and will continue to develop the wider regulatory framework for MPIs.

We remain engaged with the European Commission on future UK‑EU trading arrangements in all timeframes, as set out in the 2025 UK‑EU Common Understanding, and will provide updates on these developments as work progresses.