Ofgem has given provisional approval to a new £4.3 billion “electricity superhighway” connecting England and Scotland via a 2GW high-voltage direct current (HVDC) subsea cable.
The joint venture between the transmission arms of Scottish and Southern Electricity Networks (SSEN) and National Grid represents the largest ever single investment in Great Britain’s power grid.
At more than 500km in length, Eastern Green Link 2 will also be the longest ever underwater connection within Great Britain.
The majority of the 525kV power line – around 436km – will be buried beneath the seabed of the North Sea. There will also be roughly 70km of onshore underground cable at either end connecting to converter stations at Peterhead in Aberdeenshire and Drax in North Yorkshire.
Eastern Green Link 2 is the second project to receive provisional funding approval under Ofgem’s Accelerated Strategic Transmission Investment (ASTI) scheme, which was introduced to expedite the delivery of major transmission projects that are needed to meet the government’s target of deploying 50GW of offshore wind by 2030.
Its sister project – Eastern Green Link 1 – was the first of the 26 ASTI projects to receive provisional approval earlier this month.
The £4.3 billion figure represents the projected cost of Eastern Green Link 2 (EGL2) in current prices. This is equivalent to the almost £3.45 billion of investment approved by Ofgem based on 2018/19 prices.
The regulator said it is minded to approve almost £2.7 billion of direct costs and nearly £820 million of indirect and risk costs, but disallow more than £12 million of requested funding, most of it related to “low probability risk costs”.
The £3.45 billion total will be split 46:54 between SSEN Transmission and National Grid Electricity Transmission (NGET), with the former receiving £1.6 billion, or £2 billion in current prices.
Rebecca Barnett, director of major projects at Ofgem, 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 process which has been designed to boost Britain’s energy security by unlocking investment and speeding up the delivery of major power projects.”
“However,” she added, “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, welcomed the decision, describing it as a “critical milestone” for the project, which is due begin construction later this year and commence operation in 2029.
She said: “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.”
National Grid’s offshore delivery director Zac Richardson said: “The Eastern Green Links form part of The Great Grid Upgrade, our critical infrastructure investment plan which will upgrade and reinforce the electricity network to support the significant growth in renewable generation.
“We welcome Ofgem’s provisional decision as we believe the links will deliver the best value for money for consumers, while helping the UK decarbonise and achieve its net zero ambition.”