Interconnector capacity for the Western Isles in the spotlight as call is made for energy regulator to reconsider its view

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Scottish and Southern Electricity Networks (SSEN) is calling on the energy regulator, Ofgem, to reconsider its provisional decision on the proposed Western Isles transmission link.

The link, which is expected to bring up to £2bn in local and national socio-economic benefit, is required to connect renewable electricity generators on the islands to the main GB transmission system, taking advantage of the significant renewable potential of the Western Isles.

In its decision, which remains subject to consultation, Ofgem has indicated it is minded to reject SSEN’s proposals for a 600MW link, instead proposing a smaller 450MW connection.

SSEN’s investment case for the 600MW link, supported by independent analysis by the electricity system operator, clearly demonstrates that once just 156MW of generation is connected, a 600MW link represents an economic solution, providing significant benefits for the GB consumer.

A 600MW link would also allow for additional renewable projects on the Western Isles to come forward and connect, taking advantage of the area’s natural resources and meet the substantial community interest in developing further renewable projects.

From SSEN’s experience of developing and operating the north of Scotland transmission network, any additional spare capacity would be quickly utilised.

Based on SSEN’s analysis, the cost differential between a 450MW and 600MW link is less than 5% of the total cost of the project; but would provide a third more capacity for new renewable electricity generation and deliver an additional 30% of socio-economic benefit to the Western Isles.

Moving to a 450MW link at this late stage introduces significant risk and uncertainty to both SSEN and the Western Isles developers who are currently preparing to enter the upcoming CfD auction.

This uncertainty may also jeopardise the ultimate delivery of the link.

In its consultation, Ofgem has proposed the transmission project is delivered via a new Competition Proxy Model (CPM) rather than the proven and well-established Strategic Wider Works mechanism.

SSEN continues to have significant concerns with this proposed delivery model which is fundamentally flawed and effectively re-opens a regulatory price control for no consumer benefit.

Additionally, there has been no regulatory impact assessment undertaken specific to the application of this untested model to this project.

SSEN will continue to engage with Ofgem on this issue and is considering all options available to address these concerns.

Colin Nicol, Managing Director for Scottish and Southern Electricity Networks, said: “Whilst we welcome Ofgem’s recognition of the need for network reinforcement, we strongly encourage them to reconsider and approve a 600MW link.

“A 450MW link would be short sighted, limiting the potential for community schemes to benefit from renewables expansion.

“Moving to a 450MW at this late stage also introduces risks and uncertainty which, in turn, could impact on the delivery of a transmission link to the Western Isles.

“We call on Ofgem to look again at the robust, comprehensive analysis that underpins the 600MW investment case and listen to the broad view of stakeholders who strongly support the need for a larger link.”

Ofgem’s consultation is open until 3 May and can be found via the following link: https://www.ofgem.gov.uk/publications-and-updates/western-isles-transmission-project-consultation-final-needs-case-and-delivery-model.