Ofgem ready to consider revised proposals for links to Scottish islands

Wind turbines. Author: Ville-Matti Kaartinen. License: Creative Commons, Attribution-NoDerivs 2.0 Generic.

October 23 (Renewables Now) - UK energy market regulator Ofgem said today it is awaiting from Scottish and Southern Energy Networks (SSEN) new “evidenced and realistic” proposals for transmission links that will connect Shetland and the Western Isles to the Scottish mainland.

SSEN has already proposed two links, each of 600 MW. Ofgem’s approval for these depended to a large extent on several wind farm projects in Shetland and the Western Isles securing contracts for difference (CfDs) last month. The regulator wants to be sure the volumes of new renewable electricity generation on each island group would be enough to guarantee that consumers would not be paying for an underutilised transmission link.

The cost to realise the Shetland and Western Isles connection projects already proposed by SSEN stands at GBP 709 million (USD 914m/EUR 822m) and GBP 623 million, respectively.

SSE Renewables, a unit of UK utility SSE plc (LON:SSE), failed to secure a contract for the 457-MW Viking Wind Farm onshore wind project on Shetland in the CfD round in September. In the Western Isles, only one of two wind projects, both formerly known as Lewis Wind Power projects, secured subsidies. This means that only around 240 MW of remote island wind on the Western Isles got a CfD, while 369 MW were needed to support the transmission investment case presented by SSEN.  

In response to Ofgem’s announcement that it would now welcome revised transmission link proposals, SSEN Transmission said it remains “very confident that the proposed 600-MW links remain the most economic and efficient solutions for each island group.”

In a separate statement, SSE Renewables said it is committed to progressing the Viking Wind project, and noted that conditional approval of the Shetland needs case “would provide the necessary signal for Viking to progress towards a final investment decision.”

(GBP 1 = USD 1.29/EUR 1.16)

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