REG - OFGEM - Proposed 500km electricity superhighway funding

National GridAnnouncement

27/03/2024 08:15

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RNS Number : 3563I  OFGEM  27 March 2024

 

Proposed 500km  electricity superhighway between Scotland and Yorkshire
receives provisional £3.4billion funding package

A provisional funding package of £3.4billion has been announced for a
proposed subsea and underground 500km electricity superhighway between
Scotland and Yorkshire which could power up to 2million homes.

Eastern Green Link 2 (EGL2) is a proposed 2GW* high voltage electricity
'superhighway' cable link between Peterhead in Aberdeenshire and Drax in North
Yorkshire. Most of the cable (around 436km) will be under the North Sea with
the remaining 70km buried underground onshore. Two converter stations, one at
each end of the cable, are planned to help feed the electricity transported by
the cable into the grid and from there onto consumers.

Designed to help harness the potential of Britain's offshore wind power, EGL2
is the second project so far to proceed under Ofgem's new fast track
Accelerated Strategic Transmission Investment (ASTI) framework. Earlier this
month the first ASTI project, Eastern Green Link 1 (EGL1)
(https://www.ofgem.gov.uk/publications/proposed-anglo-scottish-electricity-superhighway-power-millions-homes-first-progress-through-fast-track-ofgem-process)
another subsea link between England and Scotland received a provisional
£2billion funding package.

ASTI
(https://www.ofgem.gov.uk/publications/decision-accelerating-onshore-electricity-transmission-investment)
 is designed to speed up the delivery of strategic energy projects, enabling
more electricity generated by offshore wind to be delivered to British
consumers. The new framework accelerates the project funding process by up to
two years. EGL2 is one of 26 projects identified as critical to meeting the
Government's target of 50GW of offshore wind capacity by 2030 and included in
Ofgem's ASTI cohort.

The project is financed by the developers with costs later recouped through
bills. To ensure consumer costs are minimised Ofgem has scrutinised the costs
proposed by the developers under the ASTI process. It has identified
£67million that could be cut from indirect costs without impacting project
delivery or quality.

Delivery of projects such as EGL2 will not only provide millions of consumers
with access to homegrown wind energy, by boosting grid capacity it will
further benefit consumers by cutting compensation paid to generators currently
asked to turn off production, during times of high wind, due to lack of grid
capacity.  

Rebecca Barnett, Ofgem Director of Major Projects, said:  

"To ensure we meet future energy demand and achieve Government net zero
targets we must speed up the expansion of the high voltage electricity network
which connects consumers to homegrown energy."

"Eastern Link 2 is the second project to reach this stage under our new
Accelerated Strategic Transmission (ASTI) process which has been designed to
boost Britain's energy security by unlocking investment and speeding up the
delivery of major power projects." 

She added: "However just because we've streamlined the approval process
doesn't mean we're handing developers blank cheques. The ASTI framework helps
ensure consumers are protected from unnecessary costs and we make budget
adjustments where we don't see maximum efficiency and benefit for
consumers."

The proposed budget is now subject to a consultation published today
(Wednesday 27 March). Feedback on the proposed budget can be sent to:
riioelectricitytransmission@ofgem.gov.uk 

The consultations are due to close on Friday  26(th) April. Ofgem will
consider all responses and will publish a decision on next steps on its
website at ofgem.gov.uk/consultations (http://ofgem.gov.uk/consultations)
. 

To view the consultation document, click here
(https://www.ofgem.gov.uk/publications/eastern-green-link-2-egl2-project-assessment-consultation)

 The project is also subject to it securing future planning permission in a
process overseen by the Planning Inspectorate. 

 

 

Ends 

 

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.     

 

 Accelerated Strategic Transmission Investment (ASTI) 

 

Delivering Net Zero requires a huge amount of new infrastructure. 

 

The Government's ambition is to build 50GW of offshore wind to be constructed
by 2030.  

 

This new infrastructure is needed to carry electricity from offshore sites to
homes and businesses, but we need it to be built at speed to meet Government's
target. 

 

The Accelerated Strategic Transmission Investment (ASTI) framework has been
designed to fast track strategically important energy transmission projects.
 

It streamlines the onshore transmission regulatory approval process and
ensures robust consumer protection to allow network infrastructure to be built
faster, accelerating build times by up to two years and unlocking capital
investment to meet the Government's target of 50GW of offshore wind capacity
by 2030 and a decarbonised power grid by 2035. 

A total of 26 projects have been identified by Ofgem for progression under the
ASTI process. 

 

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 document: Decision on accelerating
onshore electricity transmission investment | Ofgem 

   Eastern Green Link 2 (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 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.

 

 

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