A £3.4 billion funding package has been awarded by Ofgem to build a proposed new subsea and underground 500km cable between Scotland and Yorkshire which could power up to 2 million homes.
Eastern Green Link 2 (EGL2) is the first of 26 projects to complete a fast-track process to secure funding through Ofgem’s new Accelerated Strategic Transmission Investment (ASTI) framework. ASTI accelerates the funding process by up to two years, allowing electricity generated by offshore wind to be delivered to British consumers sooner.
The projects delivered via Ofgem’s ASTI programme are a vital part of the work to upgrade the energy system and allow more renewable energy to be brought onto the grid. This will help to deliver Government’s goal of clean power by 2030 and reduce our reliance on volatile international gas markets.
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 mission to upgrade the energy system at least possible cost to customers, Ofgem scrutinised the developers’ proposal and identified over £79m of savings which have been cut from the project costs without impacting delivery or quality.
ASTI projects will not only help provide millions of consumers with access to homegrown wind energy, but by boosting grid capacity they will deliver an estimated £1.5bn of savings 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.
Ofgem has announced a proposed funding allowance of £294.8m for another project in its ASTI cohort, the Yorkshire Green Energy Enablement (GREEN) project. The project involves a proposed upgrade to the local electricity network to help transport energy generated by Scottish and North Sea windfarms to consumers.
Plans include building new substations, underground cables, over 7km of overhead lines and cable sealing end compounds (where underground cables meet overhead lines). Ofgem’s proposed funding allowance are now subject to consultation with the project currently slated to be operational by 2027.
