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Ofgem has given conditional approval to revised proposals from Scottish and Southern Electricity Networks (SSEN) to build a new 600MW transmission link connecting the Shetland Islands to the mainland power grid for the first time.
The regulator had already approved the project once already but ultimately withheld funding after the proposed 475MW Viking windfarm failed to secure an agreement in the latest Contracts for Difference in September 2019.
Its latest minded-to decision is likewise conditional on the windfarm going ahead. Ofgem said it will need to see “sufficient evidence” that this is likely to happen by the end of 2020.
The subsea cable would not only allow renewable generation to be exported to the mainland but also help to maintain secure power supplies on the islands following the planned closure of the Lerwick diesel-fuelled power station in 2025.
The plant is owned and operated by the distribution arm of SSEN, which was recently given approval by Ofgem to contribute towards the costs of the transmission project. SSEN is hoping to commission the connection in 2024 and currently estimates the cost at £672 million.
Ofgem chief executive Jonathan Brearley said: “Ofgem’s immediate focus is to support the energy industry so it can respond effectively to the COVID-19 pandemic and ensure consumers, especially the vulnerable, are protected.
“Today’s announcement will help stimulate economic growth as the economy recovers from COVID 19, as well as unlocking Shetland’s potential to supply low cost renewable electricity for consumers across Great Britain.”
The deadline for response to its minded-to decision is 18 June.
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