SHET hits back at island availability incentive proposals

Scottish Hydro Electric Transmission (SHET) has hit back at Ofgem’s proposal to introduce an availability incentive to ensure transmission operators (TO) rectify faults on subsea cables to islands as quickly as possible.

SHET said in its response to an Ofgem consultation that it is “very strongly against the imposition of an availability incentive for the Scottish Island links”.

It said it is working “very closely” with Island developers to mitigate concerns over the availability of subsea cables, adding that discussions with developers are “ongoing and very constructive; we believe we can meet developers’ requirements without the need for a bespoke availability incentive”.

Ofgem has questioned whether the incentives in place for TOs to ensure faults are addressed quickly are “sufficiently strong” and should be considered as part of a mid-point review to the price control.

Links to Scottish islands tend to be single circuit connections, making them more susceptible to outages, and the subsea nature of the cables means outages are more likely to be significant in length.

However generators on the islands are not entitled to interruption payments, which Ofgem said “could make it very challenging for the generators to form viable and financeable projects that could be in consumers’ interests”.

Big six supplier EDF said it shares Ofgem’s concerns and that an availability incentive “would be beneficial”.

It added: “There is a need to ensure that the right incentives are in place to ensure that TOs invest in reliable economic equipment (not just lower capital costs) so that overall costs, including constraints costs, are minimised”.

Consumer Body Citizen’s Advice said it supports an incentive mechanism “in principle”.