ENERGY LAW AND CROSS-BORDER OFFSHORE NETWORK GOVERNANCE MODELS

1. Introduction

Cross-border offshore network governance concerns the legal and institutional arrangements used to plan, finance, construct, operate, and regulate offshore electricity infrastructure connecting two or more national energy systems. Such infrastructure increasingly includes subsea interconnectors, offshore transmission cables, offshore converter platforms, energy islands, and hybrid projects that simultaneously connect offshore wind generation and electricity markets.

Traditional offshore wind projects commonly use separate radial connections to national grids. Cross-border offshore networks require a more integrated governance model because several states, regulators, transmission system operators, generators, and market participants may share infrastructure. Energy law must therefore allocate responsibility for planning, ownership, costs, congestion revenues, capacity allocation, licensing, system security, and dispute resolution.

2. Principal Governance Models

A state-coordinated model involves governments and national regulators agreeing on offshore development zones, interconnection capacity, cost allocation, and regulatory responsibilities through bilateral or regional arrangements.

A TSO-led model gives national transmission system operators substantial responsibility for planning and developing offshore networks. Coordination between TSOs becomes essential where infrastructure crosses national boundaries.

A regulated asset model allows a separately licensed offshore transmission owner to own and operate network infrastructure under regulated revenue arrangements. Great Britain uses competitive tenders for Offshore Transmission Owners (OFTOs), while Ofgem regulates electricity interconnectors and offshore transmission assets.

A developing hybrid or multi-purpose interconnector model combines cross-border electricity trading with transmission of offshore renewable generation. Ofgem's Offshore Hybrid Asset framework is designed for this type of infrastructure. LionLink, involving the Netherlands, and Nautilus, involving Belgium, have received regulatory approval in principle under the pilot framework.

3. European Union Framework

The EU TEN-E Regulation (EU) 2022/869 provides an important legal basis for coordinated offshore network development. It requires strategic integrated offshore network development plans to consider offshore generation potential, interconnectors, hybrid projects, radial connections, network reinforcement and hydrogen infrastructure. These plans must also be coordinated with regional investment plans and the Union-wide Ten-Year Network Development Plan.

This approach reflects a regional planning model rather than isolated national infrastructure development. Cross-border projects must also comply with EU electricity-market rules governing network access, congestion management, regulatory oversight and competition.

4. United Kingdom Governance

The UK's Offshore Transmission Network Review promoted a shift from individual wind-farm connections toward more coordinated offshore network development. Government, Ofgem, the National Energy System Operator and transmission owners all perform distinct planning and regulatory functions.

In March 2026, the UK government confirmed that future interconnection policy would increasingly operate alongside strategic energy planning and the development of offshore hybrid assets. As of September 2026, Ofgem was consulting on timelines and incentives for two Non-Standard Interconnector projects within its Offshore Hybrid Asset Pilot Scheme.

5. Case Law – Baltic Cable AB v Energimarknadsinspektionen, Case C-454/18

Facts: Baltic Cable AB operated a high-voltage interconnector connecting Sweden and Germany. The Swedish regulator restricted how revenues generated from allocating interconnection capacity could be used.

Legal Issue: Whether an undertaking operating only a cross-border interconnector was subject to EU rules governing congestion revenues.

Judgment: The Court of Justice held that the relevant electricity regulation applied to an undertaking operating a cross-border interconnector. It also held that regulators must permit arrangements enabling such an operator to function under financially acceptable conditions.

Legal Principle/Ratio: Cross-border interconnector operators remain subject to regulated rules concerning network revenues and regulatory supervision.

Significance: The case demonstrates that offshore interconnection cannot be governed purely by commercial agreements. Regulatory rules must determine how cross-border network revenues, costs and investment incentives are treated.

6. Case Law – ACER v Aquind Ltd, Case C-46/21 P

Facts: Aquind sought an exemption from aspects of EU electricity-market regulation for a proposed electricity interconnector. ACER refused the application, leading to proceedings concerning the review undertaken by ACER's Board of Appeal.

Legal Issue: What level of scrutiny the Board of Appeal must exercise when reviewing ACER decisions concerning interconnector exemptions.

Judgment: The Court of Justice confirmed that the Board of Appeal must conduct sufficiently rigorous review of ACER's technical and economic assessments.

Legal Principle/Ratio: Decisions governing cross-border energy infrastructure remain subject to meaningful administrative and judicial review.

Significance: Aquind illustrates the importance of transparent regulatory decision-making where multiple jurisdictions, regulators and investors participate in major interconnection projects.

7. Conclusion

Cross-border offshore network governance is evolving from nationally separated transmission systems toward coordinated regional networks. Effective models combine joint planning, clearly allocated regulatory authority, fair cost sharing, transparent capacity allocation, regulated congestion revenues and robust dispute-resolution mechanisms. Hybrid offshore assets will make such governance increasingly central to European energy security, renewable integration and electricity-market integration.