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Ofgem is set to release early construction funding (ECF) so National Grid can get a head start on its £298 million transmission upgrade in Yorkshire.
The regulator has confirmed its minded-to position to approve National Grid Electricity Transmission’s ECF application which asks for up to 20% of the project’s total estimated cost.
National Grid said it will use the early funding to carry out a number of detailed design works, surveys and early construction activities. They include:
- Detailed design and preparation to discharge planning conditions
- Surveys, site investigations and needed mitigation
- Detailed design of substation and overhead line (OHL) engineering disciplines to meet first site access and system outages
- Third party enabling works and modifications to NGET sites
- Type registration of OHL conductor and super grid transformers units
- Advanced ground investigation works
- Associated project management and indirect costs
Ofgem said that it deemed the ECF necessary to “ensure there is no lag between the forecasted DCO [development consent order] decision, which is expected in March 2024, and commencing preliminary construction and procurement activity”.
The regulator’s minded-to decision document adds: “This helps safeguard the overall Earliest In-Service Date (EISD) for the project and reduces the risk of incurring constraint costs for the consumer.”
In addition, Ofgem supports National Grid’s plans to undertake strategic land purchase negotiations and agreements at this stage to “reduce programme risk and ensure that all necessary land purchases are completed ahead of the commencement of construction activities”.
The total scope of the project includes the installation of a new 400kV substation extension at Monk Fryton, a new 275kV substation at Overton, and 6.4km of overhead lines – 2.8km at 400kV and 3.6km at 275kV – to connect existing overhead lines to the new Overton substation.
The upgrade would increase network capacity across the B7a and B8 boundaries by 1.7GW and 394MW respectively, enabling more electricity to be transmitted from proposed renewable generation projects in Scotland and the North Sea down to demand centres in the south of England.
It would also maximise the benefits of the proposed 2GW subsea Eastern HVDC link from Torness in Scotland to Hawthorn Pit in England.
National Grid at one point estimated the cost of the Yorkshire Green project at £392 million but has reduced this figure down to £298 million following design changes.
The Yorkshire Green grid upgrade (OPN2) is one of 26 projects which Ofgem identified as suitable to be brought under the Accelerated Strategic Transmission Investment (ASTI) framework it announced in December.
The new framework is intended to accelerate the delivery of strategic onshore transmission network projects considered necessary to achieve the government’s target of deploying 50GW of offshore wind by 2050.
As such, projects covered by the framework will not be considered for late competition and will instead be delivered by the incumbent transmission owners. They will also be subject to output delivery incentives that reward/penalise transmission owners for their performance against target delivery dates.
Ofgem is now consulting on its minded-to position to release ECF. The deadline for responses is 27 November 2023.
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