Ofgem has given provisional approval to a funding package for the 2GW high voltage proposed Eastern Green Link 2 (EGL2) subsea and underground 500km electricity superhighway between Scotland and Yorkshire.
Reaching from Peterhead in Aberdeenshire to Drax in North Yorkshire, the project, a joint venture between SSEN Transmission and National Grid Electricity Transmission, is to receive £3.4bn of funding.
At a total expected nominal investment of around £4.3bn, EGL2 is the single largest-ever investment in electricity transmission infrastructure in Great Britain, SSEN Transmission said.
Most of the cable (around 436km) will be under the North Sea with the remaining 70km buried underground onshore.
Two converter stations, one at each end of the cable, are planned to help feed the electricity transported by the cable into the grid and from there onto consumers.
Designed to help harness the potential of Britain’s offshore wind power, EGL2 is the second project so far to proceed under Ofgem’s new fast track Accelerated Strategic Transmission Investment (ASTI) framework.
Earlier this month the first ASTI project, Eastern Green Link 1 (EGL1) another subsea link between England and Scotland received a provisional £2bn funding package.
ASTI is designed to speed up the delivery of strategic energy projects, enabling more electricity generated by offshore wind to be delivered to British consumers.
The new framework accelerates the project funding process by up to two years.
EGL2 is one of 26 projects identified as critical to meeting the Government’s target of 50GW of offshore wind capacity by 2030 and included in Ofgem’s ASTI cohort.
The project will be financed by the developers with costs later recouped through bills.
To ensure consumer costs are minimised Ofgem has scrutinised the costs proposed by the developers under the ASTI process.
It has identified £67m that could be cut from indirect costs without impacting project delivery or quality.
Rebecca Barnett, Ofgem director of major projects, said: “To ensure we meet future energy demand and achieve Government net zero targets we must speed up the expansion of the high voltage electricity network which connects consumers to homegrown energy.
“Eastern Link 2 is the second project to reach this stage under our new Accelerated Strategic Transmission (ASTI) process which has been designed to boost Britain’s energy security by unlocking investment and speeding up the delivery of major power projects.
“However just because we’ve streamlined the approval process doesn’t mean we’re handing developers blank cheques.
“The ASTI framework helps ensure consumers are protected from unnecessary costs and we make budget adjustments where we don’t see maximum efficiency and benefit for consumers.”
Sandy Mactaggart, director of Offshore Delivery for SSEN Transmission, added: “We welcome Ofgem’s provisional decision to approve all necessary expenditure for the Eastern Green Link 2 project, a critical milestone in the final stages of the regulatory approvals process.
“With HVDC technology set to play a leading role in the clean energy transition, the delivery of EGL2 will build on the significant expertise we have established in this cutting-edge technology following the success of our Caithness-Moray HVDC link, and the Shetland HVDC link which remains on track for energisation this summer.
“We now look forward to working constructively with Ofgem and other stakeholders to finalise the investment required, in a timely manner, to build this underwater superhighway of electricity transmission, unlocking the electricity generation capacity required to power two million homes.
“We also look forward to working with NGET and our supply chain partners on this and future projects as we continue to deliver the critical national infrastructure required to meet our energy ambitions.”
The proposed budget is now subject to a consultation which is due to close on 26 April.