REG - OFGEM - OFGEM Signs off £3.4 Bn Electricity Superhighway

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13/08/2024 08:15

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RNS Number : 1481A  OFGEM  13 August 2024

PRESS RELEASE FOR IMMEDIATE RELEASE

0700 HOURS, TUESDAY 13 AUGUST 2024

OFGEM SIGNS OFF £3.4 BILLION, 500km, 2GW ELECTRICITY 'SUPERHIGHWAY' FROM
SCOTLAND TO YORKSHIRE

·    the biggest single investment for the electricity transmission
infrastructure in Britain gets the green light from Ofgem

·    Eastern Green Two is the the first of 26 critical energy projects in
Ofgem's fast-track new funding process for offshore wind power

·    it will take clean, offshore power to 2m households and business
across Britain

·    Ofgem gives provisional green light to £294.8m to Yorkshire GREEN
(https://www.ofgem.gov.uk/publications/yorkshire-green-project-assessment-consultation)
project - upgrading clean energy grids across Yorkshire

 * backs five other smaller-scale projects across Britain to expand the power
networks

Ofgem has given the green light to a £3.4 billion funding package
(https://www.ofgem.gov.uk/publications/eastern-green-link-2-egl2-project-assessment-decision)
to build a proposed new subsea 'superhighway' with an underground 436km cable
between Scotland and Yorkshire to power up to 2million homes across Britain.

Eastern Green Link 2 (https://www.easterngreenlink2.co.uk/) (EGL2) is the
first of 26 projects to complete Ofgem's new fast-track process to speed up
sign-offs by up to two years under the Accelerated Strategic Transmission
Investment programme (ASTI).

To summarise:

·    EGL2 will deliver a 2GW* high voltage electricity 'superhighway'
cable link between Peterhead in Aberdeenshire and a new converter station Drax
in North Yorkshire, which will help harness the potential of British offshore
wind power

·    most of the cable (around 436km) will be under the North Sea from
Sandshore Bay to Wilsthorpe, Yorkshire with the remaining 70km buried
underground onshore to converter stations at either end of the cable to plug
into national the grid and from there onto consumers from Yorkshire

·    it is a joint venture between National Grid Electricity Transmission
(NGET) and SSEN Transmission - expected to be the largest single investment in
electricity transmission infrastructure in Britain to date

·    full construction is expected to begin later this year and to be
operational in 2029

ASTI slashes the time that clean offshore power is approved so gets to British
consumers and businesses. The projects delivered via are vital to upgrade the
energy system and allow more renewable energy to be brought onto the grid.

This is a big step towards the new Government's target of the national power
grid being clean 2030 to reduce Britain's reliance on volatile international
gas markets with cleaner, cheaper, more secure wind energy

Ofgem is required to upgrade the energy system at least possible cost to
customers - with EGL2's developers required to make £79m savings in its
forecast expenditure.

It is estimated ASTI will expand the national power network, reduce grid
constraints and deliver an estimated £1.5billion of savings by reducing the
need to compensate generators asked to turn off production, during times of
high wind, due to lack of grid capacity.

Jonathan Brearley, Ofgem CEO, said:

"Ofgem is fully committed to supporting the government to meet its aims of
getting clean power by 2030. Today's announcement is a further step in putting
the regulatory systems and processes in place to speed up network regulation
to achieve its aim.

"ASTI accelerates approval times for projects such as EGL2 by up to two years.
Streamlining the process does not mean blank cheques for developers as we are
able to step in and make financial adjustments to maximise efficiency and
consumer benefit."

Ofgem gave provisional approval to a sister scheme in March 2024, the proposed
Eastern Green Link1 high voltage
(https://www.ofgem.gov.uk/press-release/proposed-anglo-scottish-electricity-superhighway-power-millions-homes-first-progress-through-fast-track-ofgem-process)
subsea cable to transport 2GW of homegrown wind generating electricity between
Torness, East Lothian and Hawthorn Pit, County Durham, developed by NGET and
SP Transmission, part of SP Energy Networks. The vast majority of the 196km
cable are subsea, with the remaining 20km of cables underground linking the
cable the substations and convertor stations at either end.

Ofgem has also published updates on the following ASTI projects:

Yorkshire GREEN

Ofgem has announced a proposed funding allowance of £294.8m
(https://www.ofgem.gov.uk/publications/yorkshire-green-project-assessment-consultation)
for another project in its ASTI cohort, the Yorkshire Green Energy Enablement
(GREEN)
(https://www.nationalgrid.com/electricity-transmission/network-and-infrastructure/infrastructure-projects/yorkshire-green)
project. It involves a proposed upgrade to the local electricity network to
help transport energy generated by Scottish and North Sea windfarms to
consumers. Plans include building new substations, underground cables, over
seven kilometres of overhead lines and cable sealing end compounds (where
underground cables meet overhead lines). Ofgem's proposed funding allowance
are now subject to consultation with the project currently slated to be
operational by 2027.

North London Reinforcement Project and SHET (Scottish Hydro Electricity
Transmission) Bulk Submission

The ASTI framework enables project developers to apply for Early Construction
Funding (ECF). These allow project developers to apply for up to 20 per cent
of total forecast project costs to fund early construction activities
including land purchases, early procurement purchases and preparatory works,
such as ground preparation.

Ofgem has today approved early construction funding (ECF) requests for:

·    The North London Reinforcement Project to replace existing 275kV
overhead lines with higher voltage 400kV overhead line from Pelham substation,
Hertfordshire to Waltham Cross substation in Epping Forest, through Enfield,
and then to Tottenham substation in Haringey. The project also involves
associated works to the substations at Pelham, Waltham Cross, Brimsdown,
Tottenham and Hackney.

·    Scottish Hydro Electricity Transmission (SHET)
(https://www.ssen-transmission.co.uk/projects/) bulk submission for six
onshore and two offshore projects to boost electricity transmission capacity
to enable more clean energy to be transported to where it's needed.

NOTES TO EDITORS

*A gigawatt (GW) is equivalent to one billion watts, and one gigawatt hour
(GWh) of electricity is enough to power one million homes for one hour.

ASTI

Delivering clean energy requires a huge amount of new infrastructure, which
must be built at pace to meet Government clean energy targets.

The ASTI framework has been designed to fast track the onshore transmission
regulatory funding approval process for the transmission infrastructure needed
to hit clean energy targets.

The framework was developed and introduced in response to the previous
Government's policy ambition to connect up to 50GW of offshore generation by
2030, which was set out in the British Energy Security Strategy (published in
April 2022).

A total of 26 projects have been identified by Ofgem for progression under the
ASTI process, which is designed to help ensure Transmission Operators hit 2030
offshore wind connection goals.

If all ASTI projects are delivered by their optimal delivery dates, we expect
consumers will see a net benefit of up to £2.1bn in terms of reduced
constraint costs and carbon savings. However, this consumer benefit is
contingent upon timely project delivery.

For further detail please see the decision on accelerating onshore electricity
transmission investment
(https://www.ofgem.gov.uk/press-release/proposed-anglo-scottish-electricity-superhighway-power-millions-homes-first-progress-through-fast-track-ofgem-process)
.

EGL2

EGL2 proposes building an 'electricity superhighway' connection linking the
Scottish and English transmission networks from Peterhead in Aberdeenshire,
Scotland to Drax in North Yorkshire, England. It consists of around 436km of
2GW High Voltage Direct Current (HVDC) submarine cable laid under the North
Sea and around 70km of onshore cable buried underground. Two converter
stations are needed at each end of the cable to enable the electricity to be
fed into the onshore transmission network required to transform the
electricity to alternating current (AC) as used on onshore network.

The funding amount of £3.4bn is calculated in 2018/19 prices, the base for
the price control. Adjusted for inflation this equates to around £4.3bn.

The project is being jointly developed by Scottish and Southern Electricity
Networks Transmission (SSENT) (https://www.ssen.co.uk/)  and National Grid
Electricity Transmission (NGET) with construction planned to start in 2024,
with the new connection due to be operational by 2029.

For more on the decision see the Eastern Green Link 2 (EGL2) project
assessment decision.
(https://www.ofgem.gov.uk/publications/eastern-green-link-2-egl2-project-assessment-decision)

For more on the project visit Eastern Green Link 2
(https://www.easterngreenlink2.co.uk/) .

Ofgem will also publish a statutory consultation on the proposed modifications
to the Transmission Operator (TO) licence conditions that will formalise the
decision in the coming weeks.

Yorkshire Green

Yorkshire GREEN is a National Grid Electricity Transmission (NGET) proposed
electricity transmission network upgrade to manage increasing power flows
between the North and South of England.

The plans include a new substation extension at Monk Fryston, a new substation
at Overton with a new overhead line connection of approximately 7km to the
existing network.

Ofgem has launched a consultation on its proposed funding for the project for
more details on the consultation and how to give feedback visit the Yorkshire
GREEN Project Assessment consultation.
(https://www.ofgem.gov.uk/publications/yorkshire-green-project-assessment-consultation)

For more on the project visit Yorkshire GREEN for NGET
(https://www.nationalgrid.com/electricity-transmission/network-and-infrastructure/infrastructure-projects/yorkshire-green)
.

North London Reinforcement Project

The North London Reinforcement Project
(https://www.nationalgrid.com/electricity-transmission/network-and-infrastructure/infrastructure-projects/north-london-reinforcement#:~:text=The%20North%20London%20Reinforcement%20project%20will%20be%20completed%20by%20the,electricity%20generated%20by%20offshore%20wind.)
is an NGET project to replace an existing 275kV overhead line with a 400kV
overhead line from Pelham substation, Hertfordshire to Waltham Cross
substation in Epping Forest, through Enfield, and then to Tottenham substation
in Haringey. There will also be associated works to the substations at Pelham,
Waltham Cross, Brimsdown, Tottenham and Hackney. The project is due for
completion in 2028 and will boost network capacity and enable more energy to
be transported via the network to where it is needed.

For more on the decision see North London (HWUP) - decision on Early
Construction Funding and corresponding modification to Special Condition 3.41
of NGET's electricity transmission licence.
(https://www.ofgem.gov.uk/publications/north-london-hwup-decision-early-construction-funding-and-corresponding-modification-special-condition-341-ngets-electricity-transmission-licence)

For more on the project visit North London Reinforcement Project for NGET
(https://www.nationalgrid.com/electricity-transmission/network-and-infrastructure/infrastructure-projects/north-london-reinforcement)
.

SHET Bulk Submission

SHET is planning to deliver six onshore reinforcement projects and two
offshore projects to boost electricity transmission capacity to enable more
clean energy to be transported to where it's needed.

The project includes the following onshore elements: Beauly to Loch Buidhe
400kV Reinforcement; Loch Buidhe to Spittal 400kV Reinforcement; Beauly to
Blackhillock 400kV Double Circuit; Blackhillock and Peterhead 400kV Double
Circuit; Beauly to Denny 275kV Circuit to 400kV; East Coast Onshore 400kV
Phase 2 reinforcement.

And the following offshore elements: Spittal to Peterhead 2GW HVDC Subsea link
and Arnish to Beauly (Western Isles) HVDC link. For more on the projects visit
SSEN Transmission (https://www.ssen-transmission.co.uk/projects/) .

For more on the decision, go to Eight Scottish Hydro Electric Transmission
projects - Early Construction Funding and licence decision.
(https://www.ofgem.gov.uk/publications/eight-scottish-hydro-electric-transmission-projects-early-construction-funding-and-licence-decision)

For more on the projects visit SSEN Transmission
(https://www.ssen-transmission.co.uk/projects/) .

Ofgem has also launched consultations on ECF requests for the following ASTI
projects:

The North West Wales (NWW) is a NGET reinforcement project which will boost
electricity transmission capacity to connect consumers in the northwest of
Wales to a combined total of 5.48 GW of offshore generation, including the new
700MW Awel Y Mor Offshore Wind Farm (An extension to the existing Gwynt Y Mor
windfarm.)

To view the consultation, go to North West Wales (PTC1 and PTNO) - Early
Construction Funding and modification to the special condition 3.41 of the
electricity transmission licence.
(https://www.ofgem.gov.uk/publications/north-west-wales-ptc1-and-ptno-early-construction-funding-and-modification-special-condition-341-electricity-transmission-licence)
For more on the project visit National Grid Electricity Transmission
(https://www.nationalgrid.com/electricity-transmission/) .

 

Norwich to Tilbury project is an NGET project to upgrade to the local
electricity transmission network, which is needed to connect to new generation
including offshore wind farms. The project involves building 184km of overhead
lines between Norwich and Tilbury as well as a new substation and is currently
due to start construction in 2027.

To view the consultation, go to Norwich Tilbury - Early Construction Funding
consultation.
(https://www.ofgem.gov.uk/publications/norwich-tilbury-early-construction-funding-consultation)
For more on the project visit Norwich to Tilbury project for NGET
(https://www.nationalgrid.com/electricity-transmission/network-and-infrastructure/infrastructure-projects/norwich-to-tilbury)
.

 

Grain to Tilbury is a NGET project to enable the transmission of more clean
energy. It involves building a 2.2km tunnel under the Thames Estuary which
will replace an existing tunnel built in the 1960s and is currently scheduled
for completion in 2028.

To view the consultation, go to TKRE - Early Construction Funding and proposed
modification to the special conditions of the electricity transmission
licence.
(https://www.ofgem.gov.uk/publications/tkre-early-construction-funding-and-proposed-modification-special-conditions-electricity-transmission-licence)
For more on the project visit Grain to Tilbury project for NGET
(https://www.nationalgrid.com/electricity-transmission/network-and-infrastructure/infrastructure-projects/grain-to-tilbury)
.

 

 

 

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