Ofgem has rejected SSE Networks’ (SSEN) proposals for a 600MW grid connection between Shetland and the Scottish mainland.
The regulator said it was unable to approve the £709m subsea link after the largest planned wind farm on the islands failed to win price support in last month’s Contracts for Difference (CfD) auction.
Ofgem said in March it was minded to approve the £709m subsea link if SSE Renewables secured a CfD for the 457MW Viking wind farm.
The regulator urged SSEN to submit revised proposals for the transmission link “including establishing more certainty for consumers” that Viking will go ahead.
In a statement, SSE Renewables said it “remains committed to progressing the project” and called on Ofgem to give conditional approval to a 600MW link to “provide the necessary signal for Viking to progress towards a final investment decision.”
In addition, Ofgem called on SSEN to submit new proposals for an interconnector with the Western Isles after wind farm projects secured CfDs for up to 369MW of capacity.
The regulator would “approve a revised submission for a 450MW link or consider the case for a 600MW link if consumers were more appropriately protected from the risk of paying for an oversized link”, it said.
SSEN Transmission said it welcomes Ofgem’s “commitment to find a way forward to progress the needs cases” for both the Shetland and Western Isles transmission links but remains “very confident that the proposed 600MW links remain the most economic and efficient solutions for each island group”.