Ofgem has delayed its final decisions on whether to approve funding for two new transmission links to the Western Isles and Shetland whilst it awaits the results from the third Contracts for Difference (CfD) auction.
The decisions were previously scheduled for the summer and mid-2019 respectively but both have now been postponed after the sealed bid window for the auction was extended due to a legal challenge.
The delay is necessary because Ofgem’s approval will be conditional on the success of multiple wind projects in the auction.
Scottish and Southern Electricity Networks (SSEN) has proposed to install a 600MW cable between the Shetland Isles and the Scottish mainland by March 2024.
In March of this year, Ofgem said it was minded to approve funding for the connection on the condition that the Viking Energy windfarm – a joint project between the local community and SSE – secured a contract in the auction. If it goes ahead, the windfarm will have a capacity of up 457MW.
The company has also proposed building a 600MW link between the Western Isles and the mainland by October 2023.
Ofgem rejected this proposal but said it would be minded to approve a smaller 450MW connection if the two windfarms on the islands being developed by Lewis Wind Power – a joint venture between EDF and Wood – secured contracts. The windfarms would have a combined capacity of up to 369MW.
The results of the auction are due to be released on 19/20 September.
“As such, we expect to publish our decisions on the final needs cases for the Shetland project and the Western Isles project in late Autumn 2019,” Ofgem said in an update.
“If the timeline for the CfD allocation round is delayed materially from that set out above, then this may impact our publication dates. We will consider this further if any delay occurs.”
Ofgem said the extra time will also allow it to consider the updated cost benefit analyses that have been undertaken by SSEN and National Grid Electricity System in the time the regulator made its minded-to decisions.
SSEN has additionally proposed to build a third 220MW connection to the Orkney islands. Ofgem said it intends to publish a conditional decision on funding before the release of the auction results.
The regulator is still considering a request from SSEN for its distribution arm to contribute towards the costs of all three projects and expects to publish a decision in late autumn.