Subsea cable between Shetland and mainland refused by Ofgem

The application was set to be refused by Ofgem after a connected project failed to secure subsidies through the UK Government's Autumn Contracts for Difference auction.
The application was set to be refused by Ofgem after a connected project failed to secure subsidies through the UK Government's Autumn Contracts for Difference auction.
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Ofgem has said it will not approve a proposal to create a £709 million subsea electricity transmission link from Shetland to mainland Scotland.

The cable would connect planned windfarm projects on Shetland with mainland Scotland - allowing the island to export electricity to the rest of Great Britain.

In March, Ofgem said it was minded to approve plans submitted by Scottish and Southern Energy Networks (SSEN) for the link - however, the approval was based on the largest planned project, Viking Energy Wind Farm, securing subsidies through the UK Government’s Autumn Contracts for Difference auction. It said the award of these subsidies would have “provided confidence” that the wind farm would be likely to progress and offer protection for consumers from the risk of paying for an underutilised transmission link to the Shetland Isles.

Auction

However, the wind farm was not successful in securing these subsidies in last month’s auction.

Ofgem said it “encourages SSEN to submit revised proposals for both transmission links, including establishing more certainty for consumers that the windfarm projects will go ahead”.

The regulator also said in March that it was not minded to approve proposals for a similar link for the Western Isles, but yesterday said it was “unable to approve” the 600MW plan.

This project was also based on the two largest planned projects winning subsidies – Stornoway and Uisenis Wind Farms – but only one was successful in the latest auction.

SSE’s managing director for transmission, Rob McDonald, said: “We welcome Ofgem’s continued commitment to provide a way forward for both the Shetland and Western Isles transmission links and allow the determination of the Needs Cases.

“It is now critical that all parties work together to provide the information Ofgem require at the earliest possible opportunity. Ultimately, a successful outcome will depend on renewable developers on both island groups demonstrating that sufficient generation will progress to underpin the transmission investment cases.”

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He added: “We will now work with all parties to provide all necessary information with the upmost urgency to ensure any delays to the process are kept to an absolute minimum and to help provide the island links the best chance of success.”