Ofgem approves needs case for SSEN’s £600m grid upgrade

Ofgem has conditionally approved the final needs case for a £600 million project to boost the capacity of the electricity transmission network in Argyll and Bute.

The regulator said that Scottish and Southern Electricity Networks (SSEN) had demonstrated a “clear need” for the project.

The plans were drawn up in response to a recent surge in connection applications from renewable generators in the area.

The upgrade involves raising the voltage level of several sections of overhead power lines, while also building an entirely new connection to an existing line.

For the initial needs case assessment, SSEN estimated the price tag for the upgrades at around £352 million but it has since raised this figure to £600 million due to refinements to the project’s scope and above-inflation cost increases caused by global supply constraints.

Ofgem has conditionally approved funding for the Argyll and Kintyre project through the Large Onshore Transmission Investment (LOTI) re-opener mechanism.

However, funding will not be released until SSEN has obtained all material planning consents, with planning permission yet to be approved for a proposed 275kV overhead line between Creag Dhubh substation and Dalmally.

Once planning consents are all successfully obtained, the project will move to the next phase of the LOTI assessment process where Ofgem said it will “scrutinise” the increase in costs. In particular, the regulator will assess how SSEN has calculated increased material and procurement costs.

The pipeline of prospective projects that may need to connect to the network has also increased significantly since the initial needs case assessment.

Almost 600MW of generation is already connected to the electricity transmission network in the area. SSEN previously identified projects that could increase this to 3.3GW but there are now enough projects in the pipeline to increase the total to nearly 4.1GW. The amount of contracted generation in the pipeline has increased by around 1.6GW to almost 2.3GW.

Rob McDonald, managing director of SSEN Transmission, said: “We welcome Ofgem’s decision to approve our Final Needs Case for the Argyll and Kintyre 275kV strategy, which is a hugely important milestone in enabling the growth in renewable electricity generation across the region.

“The Argyll and Kintyre 275kV strategy is required to connect several new onshore wind farms across the region and to transport that power to demand centres across the north of Scotland and beyond, helping secure energy independence and net zero. This investment will also create hundreds of skilled jobs throughout the supply chain, boosting local and national economies.

“With all substation planning approvals in place, we now look forward to the determination of our overhead line projects and remain committed to working constructively with all stakeholders to ensure the timely delivery of this critical local and national infrastructure.”

SSEN is already replacing a long stretch of the overhead power line on the Kintyre peninsula, which is coming to the end of its operational life. To ensure it is future proof, the existing 132kV line between Crossaig and Invernay is being replaced with a new 250kV line, although it will initially only be operated at 132kV.

As part of the Argyll and Kintyre project, the company is planning to upgrade the substations along the route to enable the line to be operated at the higher voltage level. It will replace two substations at An Suidhe and Crarae, build a new substation at Craig Murrail and relocate the Port Ann grid supply point to the site, and replace the Crossaig substation with a new 275kV/132kV substation to connect to the 132kV line down to Carradale.

The company also intends to build around 10km of new 275kV overhead line between Invernay and a new 275/132kV substation at Creag Dhubh to replace the old 132kV line. This circuit will initially be operated at 132kV until the other substation upgrades have been completed.