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SSEN slams Western Isles rejection

By: Tom Russell 20/03/2019 Ofgem

Cables General Grid Interconnectors Windfarms

The Office of Gas and Electricity Markets (Ofgem) has announced its initial minded to reject SSEN’s proposal to build a 600MW transmission link to connect the Western Isles to the mainland in favour of a smaller 450 MW connection.

The decision for the Western Isles Link project is based on two Lewis Wind Power wind farm projects being awarded subsidies through the CfD auction because of the risk of consumers paying for a significantly under-utilised link

Ofgem stated it would instead support an alternative proposal that more appropriately protects consumers from the additional costs of funding a potentially significantly underutilised link. This could be either a 450MW or 600MW transmission link depending on any revised proposals SSEN put forward.

SSEN’s initial estimate for the proposed Western Isles Link 600MW link put the cost at around £663 million, and would be completed in 2023. SSEN’s equivalent initial estimate for the 450MW link put the cost at around £617 million.

In its response SSEN, stated its investment case for the 600MW link, supported by independent analysis by the electricity system operator, demonstrates that once just 156MW of generation is connected, a 600MW link represents an economic solution, providing significant benefits for the GB consumer.

A 600MW link would also allow for additional renewable projects on the Western Isles to come forward and connect, taking advantage of the area’s natural resources and meet the community interest in developing further renewable projects, according to SSEN.

Based on SSEN’s analysis, the cost differential between a 450MW and 600MW link is less than 5% of the total cost of the project; but would provide a third more capacity for new renewable electricity generation and deliver an additional 30% of socio-economic benefit to the Western Isles.

The company also stated that moving to a 450MW link at this late stage introduces "significant risk and uncertainty" to both SSEN and the Western Isles developers who are currently preparing to enter the upcoming CfD auction. Furthermore, it claims this uncertainty may also "jeopardise the ultimate delivery of the link".

Colin Nicol, Managing Director for Scottish and Southern Electricity Networks, said: "Whilst we welcome Ofgem’s recognition of the need for network reinforcement, we strongly encourage them to reconsider and approve a 600MW link.

“A 450MW link would be short sighted, limiting the potential for community schemes to benefit from renewables expansion. Moving to a 450MW at this late stage also introduces risks and uncertainty which, in turn, could impact on the delivery of a transmission link to the Western Isles.

“We call on Ofgem to look again at the robust, comprehensive analysis that underpins the 600MW investment case and listen to the broad view of stakeholders who strongly support the need for a larger link.”

Whilst Ofgem initially rejected the Western Isles Link project, it initially approved of the Shetland Link project. The 600 MW project is being developed to wind farms on Shetland to export renewable electricity to the rest of Great Britain and whilst improving the security of electricity supply on the islands. The approval is subject to the success off renewable energy projects in the upcoming Contracts for Difference auction in May 2019. For more information on the Shetland decision, click here.

Ofgem has now opened a consultation on its Final Needs Case for both projects for which responses will be gathered until 3 May 2019. It will make a decision on the business case for the projects in mid-2019.

For more information on interconnector projects worldwide, click here. Alternatively you can view projects worldwide using 4C Offshore's interactive map.

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SSEN slams Western Isles rejection

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