UK energy market regulator Ofgem has selected what is set to become Great Britain’s longest-ever subsea connection as the first project to proceed under its fast-track process and to receive a £3.4 billion funding package.
Eastern Green Link 2 (EGL2) is the first of 26 projects to complete the fast-track process to secure funding through Ofgem’s new Accelerated Strategic Transmission Investment (ASTI) framework which accelerates the funding process by up to two years.
This decision is the key final approval in the regulatory process and allows construction to get underway later this year, with the connection due to be operational in 2029, when it will be able to power up to 2 million homes.
The 2 GW high-voltage electricity “superhighway” cable link will connect Peterhead in Aberdeenshire and Drax in North Yorkshire, comprising 436 kilometers of subsea cable and 70 kilometers of onshore cable, as well as two converter stations at each end.
Jointly developed by Scottish and Southern Electricity Networks Transmission (SSENT) and National Grid Electricity Transmission (NGET), the project is seen as the longest high-voltage cable in the UK and largest ever investment in transmission infrastructure.
“Ofgem is fully committed to supporting the government to meet its aims of getting clean power by 2030. Today’s announcement is a further step in putting the regulatory systems and processes in place to speed up network regulation to achieve its aim,” said Jonathan Brearley , Ofgem CEO.
“Accelerated Strategic Transmission Investment (ASTI) accelerates approval times for projects such as Eastern Green Link 2 (EGL2) by up to two years. However, streamlining the process does not mean blank cheques for developers as we are able to step in and make financial adjustments to maximise efficiency and consumer benefit.”
Ofgem will publish a statutory consultation on the proposed modifications to the transmission operator (TO) license conditions that will formalize the decision in the coming weeks.
Ofgem also fast-tracked the 2 GW Eastern Green Link 1 (EGL1) earlier this year, revealing a provisional £2 billion funding package.
Other ASTI projects
Ofgem has announced a proposed funding allowance of £294.8 million for another project in its ASTI cohort, the Yorkshire Green Energy Enablement (GREEN) project which involves a proposed upgrade to the local electricity network to help transport energy generated by Scottish and North Sea wind farms to consumers. Plans include building new substations, underground cables, overhead lines and cable sealing end compounds. The proposed funding allowance is subject to consultation with the project currently slated to be operational by 2027.
Furthermore, Ofgem approved two Early Construction Funding (ECF) requests which allow project developers to apply for up to 20% of total forecast project costs to fund early construction activities including land purchases, early procurement purchases and preparatory works, such as ground preparation.
The ECF requests were approved for the North London Reinforcement Project which involves replacing existing 275 kV overhead lines with higher voltage 400 kV overhead lines, as well as Scottish Hydro Electricity Transmission (SHET) bulk submission for six onshore and two offshore projects to boost electricity transmission capacity to enable more clean energy to be transported to where it is needed.
SHET’s bundle includes the Spittal to Peterhead 2 GW HVDC subsea link and Arnish to Beauly (Western Isles) HVDC link.
Ofgem has also launched consultations on ECF requests for the North West Wales (NWW) reinforcement project which aims to connect consumers in the northwest of Wales to a combined total of 5.48 GW of offshore generation, including the new 700 MW Awel Y Mor offshore wind farm, an extension to the existing Gwynt Y Mor wind farm, as well as the Norwich to Tilbury project to upgrade the local electricity transmission network needed to connect to new generation including offshore wind farms.
The ASTI framework was developed and introduced in response to the previous UK Government’s policy ambition to connect up to 50 GW of offshore generation by 2030 , set out in the British Energy Security Strategy from April 2022. If all projects are delivered by their optimal delivery dates, Ofgem expects consumers to see a net benefit of up to £2.1 billion in terms of reduced constraint costs and carbon savings.