Ofgem to review 600 MW Shetland HVDC link plan
Scottish and Southern Electricity Networks Transmission (SSEN Transmission) has resubmitted its investment case for a new transmission link for Shetland to energy regulator Ofgem, in a similar proposal to the submission that was put on ice last October.
30th January 2020 by Networks
Both bids for Ofgem approval were linked to the go-ahead of the 475 MW Viking Wind Farm, a joint venture between SSE Renewables and Shetland Council, which SSE Renewables says is “the anchor project that commercially underpins the link”.
However, Ofgem advised that the case for approval would need to be re-submitted after the Viking Wind Farm failed in October’s Contracts for Difference auction.
According to SSEN Transmission, the proposed 600 MW High Voltage Direct Current (HVDC) interconnector, linking Kergord on the Shetland Isles to Noss Head on the Scottish mainland, would allow new renewable electricity generators on Shetland to export low carbon electricity to the GB market.
The link would also ensure Shetland’s future security of supply, as the largely diesel-powered Lerwick Power Station, the islands’ main current power source, is expected to begin its shutdown in 2025.
The 600 MW link is scheduled to be energised and operational by April 2024.
We have submitted a robust investment case to Ofgem which makes it clear that a 600MW link remains the most economic, efficient and timely option to secure Shetland’s future energy needs
Rob MacDonald, managing director, SSEN Transmission
SSEN first submitted its request for funding in September 2018, on the basis that the Viking Wind Farm would secure a subsidy via Ofgem’s Contract for Difference auction the following year.
Ofgem issued a “minded-to” letter supporting the project in March 2019, making success in the the Contracts for Difference auction a condition of its approval.
But when the wind farm failed to win a Contracts for Difference, Ofgem advised SSEN Transmission to resubmit its bid, saying that it should demonstrate the continued need for the proposed link, and consider an alternative size of link or alternative conditions for approval.
Ofgem’s letter also said: “If we receive a revised submission we will endeavour to consider it as soon as possible and will consult on our views on the revised Final Needs Case submission ahead of reaching a decision”.
SSEN has now opted to resubmit a proposal based on the same capacity, arguing that analysis by the National Grid Electricity System Operator supports its case that a 600MW link as the most economic, efficient and timely option.
Commenting on the new submission, Rob McDonald, managing director for transmission, said: “We have submitted a robust investment case to Ofgem which makes it clear that a 600MW link remains the most economic, efficient and timely option to secure Shetland’s future energy needs.
“As well as providing a connection for Shetland’s renewables, the link will also help address Shetland’s security of supply needs as well as offering Shetland’s oil and gas sector a unique opportunity to decarbonise its operational electricity requirements, delivering a whole system approach to support the transition to net zero emissions.
“Whilst we have listened to calls to consider delaying investment to develop a bigger link, our analysis shows that a bigger link would not be economic or efficient and would create a delay of at least two years, jeopardising the potential of any transmission link to Shetland proceeding.
“We now look forward to working constructively with Ofgem, our contracted developers and other stakeholders to progress the transmission link in a timely manner.”
According to an update on SSE Group’s website, Scottish renewables “is fully committed to building Viking Wind Farm and intends to take a final investment decision as soon as possible.
“Enabling work on the project has already begun to ensure that it can proceed without delay when a final investment decision is reached.”
Login on register to comment
Cadent backs launch of major bio-CNG HGV refuelling station
Gas network’s £250,000 infrastructure investment ensures supplies to existing connected customers have not been impacted
Editor’s blog: The biggest tests of resilience are yet to come
Network content director Jane Gray reflects on the industry's coronavirus response to date and the challenges still to come.
From the front line: Chris Garside and Andy Simcoe, Northern Gas Networks
Key workers across the power and gas networks are playing a critical role in the national response to Coronavirus. Network has committed to profiling their stories.
Related supplier content
Load patterns and lockdown: how Covid-19 is impacting electricity networks
Insights into dynamics on the low voltage network as the outbreak unfolds
How E.ON. is helping the City of London become a zero emissions city
Discover Citigen. Deep in the heart of our bustling capital
The Innovation Factor: Managing the transition to smart communication technologies in the electricity distribution sector white paper
The transition from legacy communications systems to new technologies can seem daunting for organisations in the electricity sector. But with market dynamics changing rapidly