Shetland Project Assessment decision: Ofgem confirms £642m allowance for Shetland link
SSEN Transmission – the electricity transmission owner for the north of Scotland and part of the SSE Group, the UK and Ireland’s clean energy champion – welcomes today’s decision by Ofgem in setting an allowance of £642m of capital expenditure for the Shetland HVDC link.
The High Voltage Direct Current (HVDC) link will connect Shetland to the GB energy system for the first time, enabling the connection of renewable electricity generation, underpinned by the Viking onshore wind farm currently being built by SSE Renewables. The link will also help secure Shetland’s future security of supply, reducing its dependence on thermal power generation, further supporting decarbonisation goals and the delivery of net zero.
Upon completion, the Shetland link will connect to the existing Caithness-Moray HVDC link, becoming Europe’s first multi-terminal HVDC system and the world’s first outside of China, a critical step in developing the HVDC grids of the future.
The two HVDC links represent the most significant investment ever in the electricity transmission network in the north of Scotland. At over a decade in the making, progression of the two links demonstrates SSEN Transmission’s track record and expertise in long-term network planning for the north of Scotland.
Construction of the Shetland link, which started last summer, continues to make excellent progress with the project remaining on track for energisation in 2024.
Rob McDonald, Managing Director of SSEN Transmission, said:
“We welcome Ofgem’s decision, which recognises the clear consumer benefits associated with our robust, competitively tendered procurement exercise.
“Upon completion, the Shetland link will enable up to 600MW of clean, renewable electricity, to connect to the GB energy system, making a critical contribution to decarbonisation goals as we continue to deliver a network for net zero emissions. It will also support Shetland’s future security of supply with clean, green electricity, reducing reliance on thermal power stations and further supporting decarbonisation goals.
“In developing Europe’s first and the world’s first multi-terminal HVDC system outside of China, Caithness-Moray and Shetland will demonstrate the crucial innovations in developing the HVDC grids of the future, key to support our offshore wind and net zero ambitions.
“As our teams and contractors make great progress with the Shetland link, we continue to focus on progressing further reinforcements across the north of Scotland which are key to ensuring net zero is achievable.”
To connect Shetland’s local electricity distribution network to the HVDC link and the main GB energy system, SSEN Transmission is progressing proposals for a new Grid Supply Point at Gremista, near Lerwick, and associated connection to Kergord substation. In January 2022, SSEN Transmission will submit to Ofgem a funding request for this infrastructure through Ofgem’s Medium Size Investment Uncertainty Mechanism.
These investments are part of the SSE Group’s recently announced Net Zero Acceleration Programme, which will see £12.5bn invested in the five years to 2026, or £7m every day, with SSEN Transmission expecting to invest up to £4bn over this period as it delivers a network for net zero in the north of Scotland.