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What is an NTC? | National Energy System Operator

NESO·guidance·medium·13 Mar 2026·source document

Summary

NESO publishes methodology for calculating Net Transfer Capacity (NTC) restrictions on interconnectors and compensating affected capacity holders. The current consultation runs until 17 April 2026, updating commercial arrangements for capacity restrictions. This covers all GB interconnectors and applies to both day-ahead and intraday capacity calculations.

Why it matters

The methodology determines who pays when interconnector capacity is restricted for system security reasons, affecting revenue streams for interconnector operators and cross-border electricity trading costs. As such, this shapes the commercial risk allocation for interconnector investments and cross-border arbitrage opportunities.

Key facts

  • Consultation closes 17 April 2026
  • Applies to all GB interconnectors (existing and future)
  • Covers both day-ahead and intraday capacity calculations
  • Current methodology version 2.0 published September 2023

Timeline

Consultation closes17 Apr 2026

Areas affected

interconnectorswholesale marketnetwork chargestransmission

Related programmes

Connections Reform

Memo

What this is about

NESO has published an updated methodology for calculating Net Transfer Capacity (NTC) restrictions on interconnectors and compensating affected parties. NTC determines the maximum import/export capacity that interconnectors can release to the market for each trading period, with system operators setting these limits to maintain grid security. When NESO restricts interconnector capacity below contracted levels, the methodology determines who pays compensation and how much.

This matters because NTC restrictions directly impact interconnector revenue streams and cross-border electricity trading costs. The compensation arrangements affect the commercial viability of interconnector investments and shape risk allocation between system operators, interconnector owners, and capacity buyers. With GB's interconnector capacity expanding rapidly—from 4GW in 2020 to over 12GW by 2030—these arrangements increasingly influence cross-border arbitrage opportunities and system balancing costs.

Key points

Scope and application: The methodology covers all GB interconnectors, both existing and future projects. It applies to capacity calculations made before and after the firmness deadline, affecting both day-ahead and intraday markets. Current GB interconnectors include IFA, IFA2, BritNed, Nemo Link, North Sea Link, Viking Link, and ElecLink.

Commercial compensation structure: When NESO restricts interconnector capacity for system security reasons, the methodology establishes who bears the financial impact. This typically involves compensating interconnector operators or capacity holders for lost revenue opportunities when actual available capacity falls below contracted levels. The specific compensation calculations consider the difference between contracted capacity and the reduced NTC values.

Current consultation changes: The 2026 consultation (running until 17 April) updates commercial arrangements from the previous 2023 version. Key documents include a clean methodology, tracked changes showing amendments, consultation overview, and response proforma. The consultation covers both the technical NTC calculation methodology and the associated commercial compensation framework.

Data transparency: NESO publishes NTC data for each interconnector through its data portal, including day-ahead and intraday restrictions. This provides market participants with visibility of capacity constraints and helps inform trading decisions. Different interconnectors use slightly different terminology—some report "Intraday Transfer Limits" or "Intraday Trading Limits" rather than NTC.

System security drivers: NTC restrictions typically result from transmission constraints, voltage issues, or system stability concerns on either the GB or foreign grid. These operational limits can change rapidly based on generation patterns, demand levels, and network outages. The methodology must balance market access with system security requirements.

What happens next

Consultation timeline: Stakeholders have until 17 April 2026 to respond to the current consultation. Responses should use the provided proforma, which structures feedback on specific methodology components. NESO will analyze responses and publish a summary of key themes and its decisions.

Implementation: Following consultation closure, NESO will finalize the methodology and implement updated commercial arrangements. This will affect how interconnector capacity restrictions are handled commercially across all GB interconnectors. The timing for implementation will depend on consultation feedback and any required system changes.

Industry implications: Updated arrangements will influence interconnector business cases for projects in development. Developers and investors will need to assess how revised compensation mechanisms affect project economics and risk profiles. Trading companies will need to understand how NTC restrictions impact their cross-border strategies.

Regulatory context: These changes occur alongside broader interconnector policy developments, including Ofgem's interconnector licensing reviews and DESNZ's strategic decisions on future interconnector connections. The NTC methodology must align with these wider policy frameworks while maintaining operational flexibility for system security.

European coordination: NTC arrangements require coordination with European counterpart system operators. Changes to GB methodology may trigger discussions with continental partners to ensure consistent cross-border capacity calculation approaches. This is particularly relevant as European electricity market integration continues to evolve.

The consultation represents a routine update to established commercial arrangements rather than fundamental reform. However, given the growing importance of interconnectors in GB's electricity system and their role in achieving clean power targets, these arrangements increasingly matter for overall system costs and investment incentives.

Source text2,740 words

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Maybe later [Go to your account](/user/dashboard) # What is an NTC? ![Turbine in middle of field](/sites/neso.energy/files/styles/standard_promo/public/2024-06/Turbine%20in%20middle%20of%20field-GettyImages-1447433928.jpg?h=81e8e86e&itok=IPA8kwWM) ## What is an NTC? NTC or Net Transfer Capacity is a value used by System Operators (SOs) in order to set the maximum capacity that an interconnector can import and/or export to that SO’s grid for a given Market Time Unit (MTU). The NTC process is a method of calculating the resulting maximum import and export capacities that an interconnector can release to the market (Final NTC). [Current Compensation Methodology](#Current-Compensation-Methodology) [Previous Commercial compensation Methodology Consultation](#Previous-Commercial-compensation-Methodology-Consultation) [Current Commercial Compensation Methodology Consultation](#Current-Commercial-Compensation-Methodology-Consultation) Current Compensation Methodology Previous Commercial compensation Methodology Consultation Current Commercial Compensation Methodology Consultation Current Compensation Methodology | [Name](?order=title&sort=asc "sort by Name") | [Published](?order=field_publication_date&sort=asc "sort by Published") | | --- | --- | | [NGESO IC Commercial Compensation Methodology Updated V2.0](/document/203726/download) | 29 Sep 2023 | Previous Commercial compensation Methodology Consultation These documents outline the GB methodology for commercial arrangements for payments relating to interconnector (IC) capacity restrictions resulting from NTC restrictions set by National Energy System Operator (NESO). The commercial arrangements in these documents should be applied to: * all interconnector projects (existing and future) that are connected to the GB transmission system * capacity calculations made both before and after the firmness deadline This methodology should be applied in full to ensure consistency of NTC arrangements across all GB connected interconnectors. | [Name](?order=title&sort=asc "sort by Name") | [Published Sort ascending](?order=field_publication_date&sort=asc "sort by Published") | | --- | --- | | [5. Amendments to NTC consultation response proforma](/document/281266/download) | 5 Jun 2023 | | [4. Amended methodology for GB commercial arrangements relating to interconnector capacity calculation](/document/281261/download) | 5 Jun 2023 | | [3. Amended methodology for GB commercial arrangements relating to interconnector capacity calculation tracked changes](/document/281256/download) | 5 Jun 2023 | | [2. Amendments to commercial methodology consultation cover note](/document/281276/download) | 5 Jun 2023 | | [1. Amendments to NTC commercial methodology consultation cover letter](/document/281271/download) | 5 Jun 2023 | Current Commercial Compensation Methodology Consultation | [Name](?order=title&sort=asc "sort by Name") | [Published Sort ascending](?order=field_publication_date&sort=asc "sort by Published") | | --- | --- | | [NTC Commercial Compensation Methodology Consultation Response Proforma 2026](/document/377951/download) | 6 Mar 2026 | | [NTC Commercial Compensation Methodology Consultation Overview 2026 - Open until 17 April 2026](/document/377956/download) | 6 Mar 2026 | | [NESO Commercial Compensation Methodology Draft for Consultation - Open until 17 April 2026\_TRACKED](/document/377961/download) | 6 Mar 2026 | | [NESO Commercial Compensation Methodology Draft for Consultation - Open until 17 April 2026\_CLEAN](/document/377966/download) | 6 Mar 2026 | Other useful information ## Internal * [NESO's Net Transfer Capacity restrictions submitted to Day-ahead and Intraday auctions.](https://www.neso.energy/data-portal/nsl/nsl_ntc_data) * [North Sea Link - NESO's Net Transfer Capacity](https://www.neso.energy/data-portal/nsl) * [Viking Link - NESO's Net Transfer Capacity](https://www.neso.energy/data-portal/viking) * [NemoLink - NESO's Net Transfer Capacity](https://www.neso.energy/data-portal/nemolink) * [IFA - NESO's Intraday Transfer Limit](https://www.neso.energy/data-portal/ifa) * [BritNed - NESO's Intraday Trading Limit](https://www.neso.energy/data-portal/brit-ned) * [ElecLink - NESO's Net Transfer Capacity](https://www.neso.energy/data-portal/eleclink) * [IFA2 - NESO's Intraday Transfer Limit](https://www.neso.energy/data-portal/ifa2) ## External * [Nordpool –Principle for determining the transfer capacities in the Nordic Power Market](https://www.nordpoolgroup.com/493abd/globalassets/download-center/tso/principles-for-determining-the-transfer-capacities-2023-03-23.pdf) * [Elexon - Interconnector Flow Reports](https://bmrs.elexon.co.uk/interconnector-flows) ## Footer * [About NESO](/about-neso) + [Who we are](/about/our-people) + [Operational information](/about/operational-information) + [Careers](/careers) + [Applications, portals and APIs](/applications-portals-and-apis) * [Contact us](/contact-us) + [How to report a power cut](/energy-outages) + [Help centre](https://portal.nationalenergyso.com/nesoHelpCentre/s/) + [Media centre](/news-and-events/media-centre) * [Corporate information](/corporate-information) + [Suppliers](/suppliers) + [Freedom of Information and Environmental Information Regulations](/corporate-information/freedom-information-and-environmental-information-regulations) + [Modern Slavery Statement](/corporate-information/modern-slavery-statement) + [Public Sector Equality Duty (PSED)](/corporate-information/public-sector-equality-duty-psed) ## Site * [Accessibility](/accessibility) * [Privacy notice](/privacy-notice) * [Cookie policy](/cookie-policy) * [Terms and Conditions](/terms-and-conditions) * [Security](/security) * [Responsible Disclosure](/responsible-disclosure) ## Social * [Twitter](https://x.com/NESO_energy) * [LinkedIn](https://www.linkedin.com/company/neso-energy) * [YouTube](https://www.youtube.com/%40NESO_energy) ![](/themes/custom/neso_theme/icons/logo-secondary.svg) logo--facebook