1. Introduction

An electricity interconnector is a transmission facility connecting the electricity systems of two different countries or bidding zones. Because interconnectors enable cross-border electricity trading, their availability directly affects electricity prices, security of supply, congestion management and the ability of market participants to exercise purchased transmission rights.

Interconnector availability obligations therefore require the interconnector owner, transmission system operator (TSO), or other responsible entity to maintain the interconnector in operational condition, coordinate planned outages, communicate unplanned outages, and make the available transfer capacity accessible to the market. Where an operator fails to provide capacity that it was legally or contractually required to provide, regulatory frameworks may impose compensation, cost-reflective charges, licence consequences, or other penalties.

The modern legal approach is particularly clear in EU electricity law. Article 16 of Regulation (EU) 2019/943 requires maximum interconnection capacity to be made available subject to system-security constraints and provides specific financial consequences when capacity obligations are not honoured. (EUR-Lex)

2. Meaning of Interconnector Availability

Availability means the technical ability of an interconnector to transmit electricity at a specified level of capacity during a particular period.

It normally involves:

Technical availability – whether the cable, converter stations, substations and associated equipment can operate.

Transfer capacity availability – how much cross-border capacity can actually be offered to the market.

Commercial availability – whether capacity is offered through the applicable allocation mechanism.

Operational availability – whether the interconnector is available consistently with system-security requirements.

Information availability – whether planned and forced outages are properly notified to TSOs, regulators and market participants.

Thus, an interconnector can be physically operational but still have reduced market availability because of network constraints or security requirements.

EU law requires the maximum level of interconnection capacity compatible with secure network operation to be made available to market participants. TSOs must also use redispatch and countertrading, where appropriate, to maximise available cross-border capacity. (EUR-Lex)

3. Core Availability Obligations

A. Duty to maintain the interconnector

The interconnector owner normally has an obligation to maintain the facility so that it can provide the contracted or regulatory capacity.

Maintenance obligations generally cover:

cables and overhead lines;

converter stations;

transformers;

protection systems;

control and communication systems;

metering systems;

substations;

emergency systems.

Maintenance must be planned so that unnecessary reductions in cross-border capacity are avoided.

B. Planned-outage coordination

Planned maintenance is unavoidable, but it must be coordinated with the relevant TSOs.

EU legislation requires regional coordination centres to conduct regional outage planning coordination and monitor asset availability so that operational security is maintained while interconnector capacity is maximised. (EUR-Lex)

The legal objective is therefore not simply "keep the cable running at all times." Instead, the obligation is to:

maintain infrastructure while minimising unnecessary restrictions on cross-border capacity.

This distinction is important because a legitimate safety-related outage should not automatically constitute a regulatory violation.

C. Forced-outage notification

Unexpected outages require prompt communication.

For example, the East-West Interconnector Access Rules provide that forced outages or trips must be notified to users as soon as reasonably practicable, together with information concerning their anticipated effect and duration where possible. (Ofgem)

Such provisions perform an important market-functioning role because traders need to know whether previously purchased capacity will remain available.

D. Obligation to maximise available capacity

Under Article 16 of Regulation 2019/943, TSOs cannot simply restrict interconnection capacity to deal with congestion occurring within their own bidding zone.

The framework requires the maximum level of interconnection capacity compatible with secure operation to be offered and provides for redispatching and countertrading to maximise cross-border capacity. (EUR-Lex)

This creates a significant legal principle:

internal grid problems should not automatically be converted into restrictions on cross-border trade.

4. Firm Transmission Capacity and Compensation

One of the most important provisions concerns the situation where an operator has promised firm transmission capacity but fails to provide it.

Article 16(12) of Regulation 2019/943 provides that where a TSO fails to fulfil its obligation to provide firm transmission capacity, it is liable to compensate the market participant for the loss of capacity rights. Consequential losses are excluded under that provision. (EUR-Lex)

This establishes a distinction between:

Primary compensation

Compensation for the loss of the transmission capacity right.

Consequential losses

Secondary economic losses arising from the failure—for example, potentially lost trading profits—are not automatically recoverable under Article 16(12).

The purpose is to create a predictable liability system without exposing TSOs to unlimited commercial damages.

5. Penalties for Market Participants

Availability obligations do not apply only to interconnector operators.

Market participants that acquire transmission capacity also have obligations.

Where a participant commits to use capacity but fails to use it, EU law provides that the participant may:

lose the relevant capacity rights; and

pay a cost-reflective charge.

Such charges must be justified and proportionate. (EUR-Lex)

This is important because capacity hoarding can artificially reduce the amount of capacity available to other market participants.

In 2026, Ofgem specifically addressed concerns about occasional extreme prices in interconnector auctions and stated its expectations concerning compliance with rules prohibiting interconnector capacity hoarding. (Ofgem)

6. Types of Penalties

The legal consequences of non-availability can be divided into several categories.

The precise penalty depends upon the applicable licence, access rules, market rules and national regulatory framework.

7. UK Regulatory Framework

The United Kingdom provides a useful example of a detailed regulatory approach.

Electricity interconnectors operate under specific licences and access arrangements administered by Ofgem. Ofgem's current interconnector framework includes certification, access rules and charging methodologies, including the cap-and-floor regime. (Ofgem)

The Access Rules establish contractual and operational arrangements concerning:

capacity allocation;

outages;

curtailment;

forced trips;

notification;

deemed metering;

capacity reductions.

For example, East-West Interconnector's Access Rules recognise that available capacity can change following early return from an outage and require the operator to use reasonable endeavours to notify users and allocate the newly available capacity. (Ofgem)

Ofgem has also recently approved modified Access Rules and Charging Methodology for the North Sea Link interconnector, demonstrating the continuing regulatory role of access rules in defining how interconnector capacity is used. (Ofgem)

8. Cap-and-Floor Regulation and Availability

Under the UK cap-and-floor regime, interconnector revenues are regulated through a maximum ("cap") and minimum ("floor") revenue framework.

Availability is important because the economic performance of an interconnector depends substantially upon its ability to make capacity available to the market.

Ofgem's 2024 Cap and Floor Regime Handbook identifies certification, access rules and charging methodologies as important components of the interconnector regulatory framework. (Ofgem)

The regulatory system therefore attempts to balance:

investment incentives + operational availability + consumer protection.

If an interconnector receives a regulatory support mechanism, regulators can use incentive arrangements to prevent developers or operators from obtaining protected returns while failing to deliver the expected infrastructure performance.

9. Delay and Non-Completion Penalties

Availability obligations can begin even before an interconnector becomes operational.

Ofgem's third-window framework introduced mechanisms dealing with project-delivery delays, including a Payback Mechanism for Delays, a modified backstop date and treatment of reasonable delay events. (Ofgem)

Similarly, the UK's Electricity Capacity Regulations contain a non-completion fee for a new-build interconnector capacity-market unit where the applicable completion requirements are not met. (Legislation.gov.uk)

Consequently, regulatory liability may arise at three stages:

construction stage – failure to complete;

commissioning stage – failure to achieve required capability;

operational stage – failure to maintain required availability.

10. Force Majeure

Availability liability must distinguish between controllable and uncontrollable events.

Typical force-majeure situations may include:

exceptional storms;

submarine cable damage;

war or sabotage;

extraordinary natural disasters;

certain grid emergencies;

unforeseen equipment failures.

A properly defined force-majeure event may excuse the operator from some penalties, depending upon the applicable licence or access rules.

However, force majeure should not become a blanket exemption for poor maintenance.

The regulatory question is usually:

Was the outage genuinely beyond the operator's reasonable control, and did the operator comply with notification and mitigation obligations?

11. Emergency Curtailment

An interconnector cannot be required to remain available when doing so would endanger the electricity system.

EU law recognises emergency situations in which transaction curtailment may be necessary. However, such procedures should be used only in emergencies where rapid TSO action is required and redispatch or countertrading is not possible. Except in cases of force majeure, market participants allocated capacity must be compensated for such curtailment. (EUR-Lex)

This produces an important legal balance:

system security may justify restricting an interconnector, but legitimate curtailment does not necessarily eliminate compensation obligations.

12. Indian Framework

India's cross-border electricity framework is particularly relevant because India is interconnected with neighbouring countries including Bhutan, Nepal, Bangladesh and others.

The Ministry of Power's cross-border electricity-trade framework seeks reliable grid operation, predictable regulatory arrangements and development of cross-border transmission infrastructure. It provides for bilateral arrangements within the overall governmental framework and gives CERC an important regulatory role. (Power Ministry of India)

The CERC Cross Border Trade of Electricity Regulations, 2019 specifically require cross-border trade to be conducted in a manner that ensures reliable, secure and stable operation of the interconnected grid. The regulations also provide for coordination between the system operators of the two countries. (CERC)

The Indian model consequently places considerable emphasis on:

system security;

coordinated operation;

restoration;

system-operator instructions;

bilateral coordination;

regulatory approval.

CERC's regulatory database shows that the Cross Border Trade of Electricity Regulations have subsequently been amended, including amendments in 2023 and 2025. (CERC)

13. Important Case Laws

13.1 E.ON Energie AG v. ACER / Baltic Cable — C-454/18

This is one of the most relevant CJEU authorities concerning the economics and regulation of cross-border interconnectors.

The Court considered Article 16(6) of Regulation 714/2009 and held that the provision applies to an undertaking that merely operates a cross-border interconnector. It also held that operation and maintenance expenditure cannot simply be treated as network investments for purposes of the congestion-revenue rules. (FRA)

The Court further held that a national regulatory authority must ensure that an interconnector-only operator can operate under financially acceptable conditions, including an appropriate profit where necessary. (EUR-Lex)

Significance

The case demonstrates that interconnector regulation must balance:

availability + maintenance costs + congestion revenues + financial sustainability.

An availability regime that imposes obligations without allowing reasonable recovery of legitimate operating costs may undermine the economic viability of the infrastructure.

13.2 European Union Agency for the Cooperation of Energy Regulators v Aquind Ltd — C-46/21 P

In Aquind, the CJEU considered the regulatory treatment of a proposed UK-France electricity interconnector and an exemption application under the former Regulation 714/2009.

The Court's 2023 judgment concerned the role and review of ACER and the exemption framework for new interconnectors. (EUR-Lex)

Although the case was not principally a penalty case, it is important because exemptions can affect the regulatory obligations applicable to new interconnectors, including access and congestion-management arrangements.

14. Legal Principles Emerging from the Case Law

The legislation and case law collectively establish several important principles.

1. Availability is a regulatory obligation

Interconnector operation is not merely a private commercial activity where the operator is subject only to ordinary contract law.

2. Security limits availability

An operator is not required to sacrifice system security merely to maximise commercial capacity.

3. Capacity rights must be protected

Where firm capacity has been allocated and the TSO fails to provide it, compensation may be required.

4. Penalties must be proportionate

Charges imposed on participants for failure to use capacity must be cost-reflective, justified and proportionate. (EUR-Lex)

5. Outage coordination is essential

Planned outages should be coordinated regionally so that unnecessary reductions in cross-border capacity are avoided.

6. Financial sustainability matters

The E.ON/Baltic Cable judgment demonstrates that regulatory arrangements must allow an interconnector operator to remain financially viable while complying with its regulatory obligations. (EUR-Lex)

15. Regulatory Enforcement Model

A sophisticated interconnector availability regime can therefore operate through the following sequence:

Availability obligation → monitoring → outage reporting → capacity calculation → market allocation → breach identification → compensation/penalty → regulatory review.

The regulator may examine:

duration of outages;

frequency of forced outages;

planned versus unplanned outages;

available transfer capacity;

technical causes;

notification compliance;

maintenance practices;

system-security justification;

financial impact on market participants.

Repeated violations can justify stronger regulatory intervention.

16. Conclusion

Interconnector Availability Obligations and Penalties form an important part of modern electricity-market regulation. An interconnector is not simply a physical cable between two countries; it is a critical market infrastructure whose availability affects cross-border competition, electricity prices and security of supply.

The principal legal obligation is to make available the maximum technically feasible capacity consistent with secure system operation. EU law additionally creates a structured liability system: market participants that fail to use committed capacity may lose their rights and face proportionate cost-reflective charges, while TSOs that fail to provide firm capacity can be liable for compensation for the loss of capacity rights. (EUR-Lex)

The UK demonstrates how these principles can be incorporated into licences, access rules, cap-and-floor arrangements and delay incentives. India, through the CERC cross-border framework, places particular emphasis on coordinated and secure operation of cross-border links. (Power Ministry of India)

The central legal principle can therefore be stated as follows:

Interconnector operators must provide and maximise commercially available capacity subject to system-security requirements, while a transparent and proportionate liability regime must allocate the financial consequences of unjustified non-availability to the party responsible.

This approach seeks to prevent both operator under-performance and unreasonable penalties for legitimate system-security or force-majeure events, thereby maintaining the reliability and economic efficiency of cross-border electricity markets.