Electricity ‘superhighway’ receives initial approval

Ofgem has given preliminary approval to two high voltage direct current (HVDC) transmission links connecting England and Scotland.

The subsea cables – the first two in a series of four such connections proposed along the east coast of Britain – will each have a capacity of 2GW.

The power lines are needed to circumvent network congestion on the boundary between England and Scotland, which is limiting the amount of electricity that can be transported from renewable generation in the north to demand centres in the south.

The two links are estimated to cost £3.4 billion in total, making the project the largest electricity transmission investment in Britain’s recent history.

Although the exact routes are yet to be finalised, the power lines will run from Torness in the south east of Scotland to Hawthorn Pit in the north east of England and from Peterhead in the north east of Scotland to Drax in North Yorkshire.

The project was jointly proposed by all three of the electricity transmission networks in Great Britain – National Grid, Scottish and Southern Electricity Networks (SSEN) and SP Energy Networks.

The preliminary approval by Ofgem follows an initial needs case assessment for the proposals which were submitted under its Large Onshore Transmission Investment uncertainty mechanism for projects with an expected capital expenditure in excess of £100 million. It held a consultation on its findings in May.

Ofgem said it is satisfied the project will have clear benefits for consumers, noting analysis from National Grid Electricity System Operator (ESO) – now legally separate from the rest of the National Grid Group – that delays in delivering the connections could significantly increase constraint costs for the ESO. The regulator said its cost benefit analysis for the two links suggested a net present value of £10 billion.

Although the project meets its criteria, Ofgem said it has not yet decided whether to apply one of its proposed models for late-stage competition. It said it is difficult determine whether the legislation required to implement its Competitively Appointed Transmission Owner model will be passed in time and there is no meaningful downside to putting off the decision until it has clarity.

The transmission owners have started carrying out work to refine the cable routes and are expected to submit a final needs case in December and seek planning approval in early 2022. They also expected to submit an initial needs case for the other two east coast links within the next 12 months.

Rob McDonald, managing director of SSEN Transmission, said: “We welcome Ofgem’s timely decision which will allow progression of the final needs case for the east coast HVDC links, recognising the need and urgency for these investments.

“With the eyes of the world on Glasgow as the UK hosts COP26, the two proposed HVDC links are critical to support efforts to tackle the climate emergency, supporting the UK and Scottish Government’s 2030 offshore wind targets and the transition to net zero emissions.

“Ofgem’s decision therefore marks a critical milestone in the regulatory approvals process.

“We now look forward to working constructively with Ofgem and other stakeholders to unlock the investment required and secure the supply chain, in a timely manner, to build the first phase of an underwater superhighway of electricity transmission.”

Chris Bennett, acting president of National Grid Electricity Transmission, said: “We welcome the positive news from Ofgem. The Scotland to England green links are part of our ambition to reinforce our network along the east coast to support the significant growth in renewable and low carbon generation.

“We believe they will deliver the best value for money for consumers, while helping the UK decarbonise and achieve its net-zero ambition.”