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Ofgem to nod to Shetland subsea link but reject Western Isles proposal

Wind farm in Scotland. Author: Neil Williamson. License: Creative Commons, Attribution-ShareAlike 2.0 Generic.

March 20 (Renewables Now) - UK energy regulator Ofgem on Tuesday announced it is “minded to approve” plans for a subsea electricity cable from Shetland to the Scottish mainland but will likely reject a similar proposal for the Western Isles.

Both projects were developed by Scottish and Southern Energy Networks (SSEN), part of UK utility SSE (LON:SSE). The first one, estimated to cost around GBP 709 million (USD 937.8m/EUR 826.6m), calls for the construction of a 600-MW subsea transmission line that will export power from new wind parks on Shetland and will also ensure energy security for the islands.

The link is scheduled to be completed in 2024. Its construction, however, is subject to Ofgem’s final approval, which the regulator said will depend on the Viking Energy Wind Farm project, of between 412 MW and 457 MW, securing subsidies through the UK government’s Contracts for Difference (CfD) auction.

Meanwhile, Ofgem “is minded to reject” another 600-MW proposal by SSEN for a transmission line between the Western Isles to the Scottish mainland based on concerns about the cost consumers will have to pay for having “a significantly underutilised link.” Instead, Ofgem said it will support alternative proposals by SSEN, either for a 450-MW link or a 600-MW one but at a reduced cost that “more appropriately protects consumers from the additional costs.”

The Western Isles project, calling for an investment of GBP 663 million, is based on the up to 369-MW Lewis Wind Power wind farms getting CfD subsidies, which would protect consumers from the risk of paying for a link that is bigger than needed. An estimate by SSEN for a 450-MW link shows such a project would require around GBP 617 million. The link is to be completed by 2023.

Ofgem is expected to take a final decision for the two projects in the middle of this year.

(GBP 1.0 = USD 1.323/EUR 1.166)

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Veselina Petrova is one of Renewables Now's most experienced green energy writers. For several years she has been keeping track of game-changing events both large and small projects and across the globe.

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