Scottish Hydro Electricity (SHE) Transmission’s cable is due for completion in 2018 and will then allow 1.2 GW of renewable electricity generation in the north of Scotland to connect to the grid.
“This is a major step forward for an essential upgrade to the high voltage grid so that more renewable energy can connect to the networks,” said Ofgem’s senior partner for transmission, Martin Crouch. “Today’s decision means that the company can move forward with work on the upgrade.”
The regulator added that it has made changes to the charges paid by renewable generators to use the electricity transmission network, lowering the costs to reflect the fact that renewable generation uses the system less than traditional forms of generation.
“The changes to transmission charging are the result of an extensive consultation process and detailed analysis. The new arrangements more accurately reflect the costs of Britain’s diverse energy generation and will lead to lower costs overall for consumers,” Crouch added.
In a statement Ofgem said that SHE Transmission has already submitted further details on the project, which Ofgem will analyse to ensure the upgrade is appropriate and offers value for money for consumers.
If Ofgem finds that the project could be delivered for less, then it will lower the amount of funding allowed to complete it, it added.