The Office of Gas and Electricity Markets (Ofgem) has approved a new subsea link in the north of Scotland. Scottish Hydro Electricity (SHE) Transmission’s power network £1.2 billion upgrade is expected to connect 1.2GW of new renewable electricity generation when completed in 2018. The upgrade will help meet Britain’s renewable target at a lower cost to consumers.
The new subsea link will connect the electricity grid on either side of the Moray Firth. Ofgem is currently going over spending, technical and delivery plans for the upgrade submitted by SHE Transmission. If Ofgem determines that the project could be delivered for less, then it will lower the amount of funding available to complete it.
Ofgem has also announced changes to the methodology for calculating what generators pay to use the electricity transmission network. The agency reports, “This change is being made to better reflect the costs that different generators have on the system. The methodology will retain the locational signal to encourage generators to build as close as possible to where energy demand is.”
This reduces the need to build costly infrastructure such as electricity pylons. According to Ofgem, “the primary update will recognize that renewable generation uses the system less than traditional forms of generation and so imposes lower costs. The change will therefore more accurately reflect the costs that different generators put on the electricity network.”
Transmission Senior Partner Martin Crouch adds: “This is a major step forward for an essential upgrade to the high voltage grid so that more renewable energy can connect to the networks. Today’s decision means that the company can move forward with work on the upgrade. We have already started on the next phase of checking SHE’s spending plans and we will ensure it completes the work as efficiently as possible so that consumers pay a fair price for this.”