Shetland link gets Ofgem’s nod, subject to Viking Wind getting built

UK energy market regulator Ofgem yesterday said it is minded to approve the 600-MW subsea electricity transmission link from Shetland to mainland Scotland, proposed by Scottish and Southern Energy Networks (SSEN).

The connection is needed to ensure the future security of supply for Shetland as the Lerwick Power station is planned to cease full duty operations by 2025.

SSEN, part of UK utility SSE plc (LON:SSE), in January 2020 resubmitted plans to build the link. Its previous attempt to secure Ofgem’s nod failed because the company did not secure a contract for difference (CfD) for the 457-MW Viking Wind Farm on Shetland in the September 2019 allocation round. This onshore wind farm is considered the anchor project which commercially underpins the Shetland transmission link.

Ofgem’s approval now is subject to receiving sufficient evidence by the end of this year that the wind project “is likely to go ahead”. According to Viking Energy Wind Farm LLP, the project is shovel-ready and the final investment decision would be taken as soon as possible.

“Today’s announcement will help stimulate economic growth as the economy recovers from COVID 19, as well as unlocking Shetland’s potential to supply low cost renewable electricity for consumers across Great Britain,” Ofgem CEO Jonathan Brearley said. The regulator has also given conditional approval to a transmission link in Orkney and the thumbs-up to the Hinkley-Seabank and Caithness-Moray links.

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