A £3.4 billion funding package has been awarded to build a proposed new subsea and underground 500km cable between Scotland and Yorkshire which could power up to 2 million homes, and expedite the delivery of energy generated via offshore wind in the North Sea.
Eastern Green Link 2 (EGL2) is the first of 26 projects to complete a fast-track process to secure funding through Ofgem’s new ASTI framework, which the energy regulator said accelerates the funding process by up to two years, allowing electricity generated by offshore wind to be delivered to consumers sooner.
EGL2 will deliver a 2GW high voltage electricity ‘superhighway’ cable link between Peterhead in Aberdeenshire and Drax in North Yorkshire, which will help harness the potential of British offshore wind power. 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.
As part of its declared mission to upgrade the energy system at least possible cost to customers, Ofgem said it scrutinised the developers’ proposal and identified over £79m of savings which have been cut from the project costs without impacting delivery or quality.
By boosting grid capacity, ASTI projects will open up access to homegrown wind energy, and deliver an estimated £1.5billion of savings, said Ofgem, by reducing the need to compensate generators who are currently asked to turn off production, during times of high wind, due to lack of grid capacity.
Jonathan Brearley, Ofgem CEO, said: “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.
“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.”
Work on the project is expected to begin later this year and to be complete by 2029.
Responding to the announcement, Lawrence Slade, Chief Executive of Energy Networks Association (ENA) which represents the UK’s electricity network operators said: “This is really welcome news from Ofgem. To move us forward towards clean power will require the biggest upgrade to the grid in decades. In turn these projects will unlock jobs, secure work for contractors and suppliers, and ultimately mean more secure energy supplies in the future. This is a crucial part of that jigsaw.”
Other projects in the ASTI cohort include the Yorkshire Green Energy Enablement (GREEN) project, for which Ofgem has announced a proposed funding allowance of £294.8m. GREEN involves a proposed upgrade to the local electricity network to help transport energy generated by Scottish and North Sea windfarms to consumers.
