REG - OFGEM - Ofgem unlocks early investment for key projects

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19/11/2025 08:15

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RNS Number : 0465I  OFGEM  19 November 2025

Ofgem unlocks early investment for slew of fast-track clean power projects

 

·      Ofgem approves early construction funding (ECF) for strategic
electricity transmission projects

·      Investment will finance procurement of sought after materials and
early enabling activities

·      Granting early investment means if projects receive planning
permission, they'll be able to connect consumers to homegrown clean power
faster

 

Great Britain's energy security and clean power ambitions have received a
major boost after Ofgem greenlit early construction funding for a number of
major electricity transmission projects.

 

Today (Wednesday 19 November) Ofgem has approved Early Construction Funding
(ECF) requests for the following projects:

 

·      Eight Scottish Hydro Electric Transmission Plc (SHET) electricity
transmission projects. For further information see:
https://www.ofgem.gov.uk/consultation/eight-scottish-hydro-electric-transmission-projects-early-construction-funding-and-licence-consultation-round-2
(https://www.ofgem.gov.uk/consultation/eight-scottish-hydro-electric-transmission-projects-early-construction-funding-and-licence-consultation-round-2)
 

·      Sealink, a proposed NGET transmission project between Suffolk and
Kent to provide transmission system reinforcement in the south and east
regions. For further information see:
https://www.ofgem.gov.uk/consultation/sealink-early-construction-funding-consultation
(https://www.ofgem.gov.uk/consultation/sealink-early-construction-funding-consultation)
 

 

 

The projects are part of the Accelerated Strategic Transmission Investment
(ASTI) framework, Ofgem's streamlined process will help achieve the
Government's clean power goals including connecting 43 - 50GW of offshore wind
by 2030

 

The funds will be used to finance early procurement of materials in high
demand around the world such as HVDC cables. With many countries around the
globe seeking to decarbonise their grids, competition for such resources is
fierce.

 

Ofgem's ECF mechanism enables Transmission Operators (TOs) to get their orders
in at the earliest opportunity and reduces the risk of costly procurement
delays. ECF is also used to finance associated enabling works such as land
purchases and surveys.

 

Beatrice Filkin, Ofgem Director of Major Projects, said:

"Today's decision means that we'll be able to power more homes with homegrown
clean power faster.

"Releasing early investment to suitable projects equips British Transmission
Operators (TOs) to compete globally, avoid delays caused by supply chain
constraints and secure the sought-after materials and components to boost our
energy security and power our homes and economy.

 

She added: "It's important to underline that we are not handing projects blank
cheques nor greenlighting the projects themselves - these are rightly
decisions for the relevant planning authorities.

"We work with the TOs to ensure intelligent use of early investment, so that
any losses are minimised, if projects are altered, cancelled or refused
permission, and any unspent money is returned to consumers. TOs must also show
us how the things they spent money on are expected to benefit consumers - if
they can't, they can't pass on those costs to billpayers." 

 

ASTI was launched by Ofgem in late 2022. It identified 26 projects key to
achieving Government decarbonisation targets and reducing Britain's exposure
to volatile international gas prices. The projects will enable more
homegrown power to be harnessed and supplied to consumers, while also driving
down the costs currently incurred when, for example, wind generators are paid
to stop generating because there isn't the grid capacity for their
energy.

 

End

 

On background

 

ASTI

 

Delivering the Government's Clean Power ambitions requires a huge amount of
new infrastructure. The Government's ambition for offshore wind alone is to
connect between 43 and 50GW to the grid by 2030.      

Ofgem's Accelerated Strategic Transmission Investment (ASTI) framework was
specifically designed to fast track its assessment of 26 strategically
important energy transmission projects needed to enhance the electricity
network.

ASTI streamlines the onshore transmission regulatory approval process,
accelerating project build schedules, whilst also ensuring robust consumer
protection in a fast-track process to deliver the network infrastructure
needed for clean power as soon as possible. 

This will also help achieve government decarbonisation goals and reduce Great
Britain's exposure to volatile international gas prices. It will also help
drive down the constraint costs which are incurred when wind generators are
paid to stop generating, because there isn't enough grid capacity to
accommodate all the clean homegrown energy they are generating.

 

Early Construction Funding (ECF)

 

ECF enables TOs to lay the groundwork for big transmission projects with site
surveys, design work and a range of procurement and early enabling activities.
This can help developers swiftly proceed to delivering the proposed project if
approved by the relevant planning authority. 

 

Project approval

 

Ofgem doesn't grant planning permission for transmission projects, or decide
things such as location, route, design and whether electricity connections go
above or below ground - these would be decisions for the relevant planning
authorities and the transmission owners themselves.

Also granting of ECF does not constitute full funding approval for a
project.

 

Summary of projects which have had their requests for ECF approved:

 

 Eight Scottish Hydro Electric Transmission Plc (SHET) electricity
transmission projects.

·      Arnish to Beauly (Western Isles) HVDC link (BIDC)

Arnish to Beauly (Western Isles) HVDC link is an offshore electricity
transmission project which will enable 1.8GW of renewable generation from wind
farms on the Isle of Lewis in the Western Isles to be transported to the
Beauly area in the North of Scotland.

Spittal to Peterhead 2GW HVDC Subsea (PSDC)

Spittal to Peterhead HVDC Subsea link (PSDC) will enable energy generated by
ScotWind to be transported from the far north of Scotland to the east coast of
Peterhead. It involves constructing a 2GW HVDC subsea link from a new 400kV
substation at Spittal to a 400kV substation at Peterhead. It will also involve
the construction of 2GW HVDC converter stations within the Spittal and
Peterhead areas.

·      Beauly to Loch Buidhe 400Kv (BLNV) Reinforcement and Loch Buidhe
to Spittal 400V reinforcement (SLU4)

These two projects involve constructing a new 170km 400kV double circuit
overhead line between Spittal 400kV substation and Beauly 400kV substation, a
new 400kV substation at Loch Buidhe and a new 400 kV double busbar substation
at Spittal, along with reinforcing existing substations at Loch Buidhe and
Spittal. The upgrade is needed to increase grid capacity to enable more
onshore and offshore renewable energy to be fed into the grid.

·      Beauly to Blackhillock 400kV Double Circuit (BBNC) and
Blackhillock and Peterhead 400kV Double Circuit (BPNC)

These two projects involve constructing a new 110km 400kV double circuit
overhead line between new 400kV substations to be constructed at Beauly,
Blackhillock, New Deer and Peterhead. The upgrade is needed to enable more
renewable energy to be fed into the grid.

·      Beauly to Denny 275kV Circuit to 400kV (BDUP)

This project involves installing new infrastructure to enable the existing
Beauly Denny overhead line's second circuit to change operation from 275kV to
400kV. Plans involve constructing new 400kV substations at Beauly 2,
Fasnakyle, Fort Augustus, and Braco West, and extend substations at
Kinardochy, Errochty and Tummel. The upgrade is needed to enable energy
generated by ScotWind wind farms and Coire Glas pumped storage, to be fed into
the grid.

·       East Coast Onshore 400kV (TKUP)

This project involves constructing 400kV substations at Tealing and Fiddes and
extending the existing Kintore substation and construct a new 106km 400kV
double circuit overhead line between the Kintore, Fiddes and Tealing
substations, and refurbish and upgrade an existing 38km of overhead line to
accommodate 400kV double circuit operation between Tealing and Glenrothes.

Updated percentage of ECFs granted to projects in total following decision:

Western Isles (11%), PSDC (13%), BLNV (20%), SLU4 (31%), BBNC (13%), BPNC
(19%), BDUP (27%), TKUP (17%)

For more on the decision see
https://www.ofgem.gov.uk/consultation/eight-scottish-hydro-electric-transmission-projects-early-construction-funding-and-licence-consultation-round-2
(https://www.ofgem.gov.uk/consultation/eight-scottish-hydro-electric-transmission-projects-early-construction-funding-and-licence-consultation-round-2)
 

 

Sea Link

 

Sea Link is a proposed NGET project to reinforce the electricity transmission
network between Suffolk and Kent, providing needed transmission system
reinforcement in the south and east regions. The current proposals are for
approximately 122km of high voltage direct current (HVDC) offshore cable, the
construction of two new converter stations within 5km of the proposed Friston
substation and the existing Richborough to Canterbury overhead line, proposed
to be connected via high voltage alternating current (HVAC) underground cables
in Suffolk, and a double circuit turn to a new Minster substation in
Kent.   

The project will reduce network constraints on the heavily utilised network on
the east coast. NESO's Clean Power 2030 advice identified the project as an
investment required in order allow the Government's clean power objectives to
be reached. The project has been highlighted as needing to be accelerated due
to the consequences of it not being delivered by 2030, with NESO estimating
that failure to accelerate Sea Link to 2030 could cost consumers between £1.1
- 1.4 billion in annual constraint costs.  

The project has been granted ECF which accounts for 27% of the updated total
project cost.

For more on the decision see:
https://www.ofgem.gov.uk/consultation/sealink-early-construction-funding-consultation
(https://www.ofgem.gov.uk/consultation/sealink-early-construction-funding-consultation)
 

 

 

 

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