National Grid Electricity Transmission (NGET) and Scottish Power Transmission (SPT) have agreed to pay a redress package of £158 million for delays to the Western Link Project, following an investigation by energy regulator Ofgem.
The two-year delay is said to have restricted renewable generators in Scotland to export electricity to England and Wales, because at times there was not enough capacity to do so.
Because generators in Scotland were unable to transport the energy they were generating, National Grid ESO sometimes had to reduce the output from wind farm generators to protect the electricity system, ultimately leading to higher costs for consumers.
£15 million of the redress package will be paid into Ofgem’s Redress Fund, which is operated by the Energy Saving Trust and allows companies to pay a sum of money to appropriate charities, trusts, organizations or consumers as a result of breaches of license conditions.
The remainder will be returned via reduced system charges, which are ultimately paid for by consumers as part of their overall electricity bills, so they will benefit through lower bills.
To remind, NGET and SPT own the license for the project which fell two years behind its expected delivery date of March 2017 to June 2019.
Ofgem said its investigation found that the root causes of the delay were problems with land acquisition, manufacturing processes, installing the cables and commissioning tests and acknowledged that NGET and SP did not cause or exacerbate the delay.
However, Ofgem stated it holds NGET and SPT ultimately responsible, as license holders, for the delay caused by their supply chain.
“To deliver the UK’s climate change ambitions, more of our electricity will come from renewable generation. This is already happening, with offshore wind and other projects in development. Innovative projects such as the Western Link are vital in moving clean energy from where it’s produced to where it’s needed,” said Cathryn Scott , Ofgem’s director of enforcement and emerging issues, said:
“However, they must be delivered on time and to the standards agreed. Where they are not, as the energy regulator, we will hold the licensees accountable.”
The Western Link transmission project, worth around £1.2 billion, provides a major subsea electricity link between Scotland and Wales.
The cable connects the west coast of Scotland with Quay Bay on the north coast of Wales.