The future of the north of Scotland electricity transmission system has been set out in the recently published Business Plan from SSEN for Ofgem’s consideration.

The Business Plan, titled ‘A Network for Net Zero’, covers the period from April 2021 to March 2026 and follows substantial consultation with national and local stakeholders as well as SSEN Transmission’s independent expert RIIO-T2 User Group.

It aims to support both the UK and Scottish Governments’ net zero emissions targets and meet the needs and expectations expressed by stakeholders through five clear, ambitious goals:

• Transport the renewable electricity that powers 10 million homes
• Aim for 100% transmission network reliability for homes and businesses
• Every connection delivered on time
• One third reduction in greenhouse gas emissions
• £100 million in efficiency savings from innovation

The north of Scotland and its islands have a significant renewable energy resource from onshore and offshore wind, hydro and (potentially) marine and tidal. At the end of 2018, 15% of the UK’s installed renewable generation capacity was located in the north of Scotland.

Rob McDonald, Managing Director for SSEN Transmission, said:

“With our network region home to some of the UK’s greatest resources of renewable energy we have a critical role to play in the fight to prevent the worst effects of climate change, connecting up more renewable energy and transporting it across the country.

“We believe our Business Plan represents a balanced package that makes a powerful case for the vital investment needed to deliver a pathway net zero.  It will also lead to improved network reliability, at an affordable cost to consumers, whilst also providing a fair return to investors.

“We would like to thank all our stakeholders who helped shape our plan and we now look forward to Ofgem’s consultation on our final Business Plan and the subsequent open hearings, which are expected to take place in the first half of 2020.”

Prices

A minimum total expenditure of £2.4bn over the RIIO-T2 period in investment to maintain and grow the north of Scotland transmission network. This is required to meet the certain needs of current and future electricity generators and customers, delivering a clear pathway to net zero.

Currently, the average GB household pays around £4.72 for the north of Scotland transmission system. We model an increase in the cost to between £5.43 and £5.96 in 2021/22 (the first year of the RIIO-T2 period). This is in part due to continued growth of the network and, in part, due to planned regulatory finance changes.

It is anticipated additional investment will be required to deliver the transition to net zero, but this investment will only be released once there is certainty it is needed.

Reducing SSEN’s Environmental Impact

SSEN Transmission is setting an ambitious goal to reduce its own greenhouse gas emissions by one third, consistent with that required to deliver a pathway to net zero.  The main ways in which SSEN Transmission will achieve this goal is to clean up the gases used in its network infrastructure and to decarbonise its transport fleet.

In 2018 the total installed generation capacity in GB was 101 GW, of which renewable generation was 44.3 GW.  24 % of this renewable generation is located in Scotland and 15% in the north of Scotland

Employment

The number of  direct employees will be increased from around 500 today to over 700, with significantly more jobs expected through SSEN Transmission’s supply chain.

Orkney 

The Orkney Islands have a significant renewable energy resource, from both wind and water. However the electricity network for the islands is ‘full’ meaning that no further generation can connect. We have worked with stakeholders to develop an economic transmission investment to connect the islands to the mainland via 220kV subsea cable from Dounreay to Finstown. On 16 September 2019, Ofgem published its decision to approve our proposed Orkney link investment. However this decision is conditional on Ofgem being satisfied at or before December 2021 that at least 135 MW of generation is ready to proceed.

Conditions Set By Ofgem Are A Challenge For Orkney

Shetland

The Shetland Islands also have a significant renewable energy resource that cannot be developed due to lack of electrical grid infrastructure. Our proposal for a 600 MW HVDC link between Shetland and Caithness was given minded-to approval by Ofgem in March 2019, conditional upon Viking Energy Wind Farm being awarded a Contract for Difference (CfD) in the 2019 auction. On 23 October 2019, Ofgem advised that, in light of the CfD auction outcome, the condition had not been met. We are now working with stakeholders to make a revised Needs Case submission before end 2019/20.

To deliver its plans, SSEN Transmission estimates its average cost to the GB consumer over the RIIO-T2 period will be around £7 a year.

As part of Ofgem’s consideration of the final plan, the regulator will consult with stakeholders during 2020 before determining what level of investment should be taken forward from 2021 through to 2026.

To view the Business Plan and all supporting documents, please visit www.ssen-transmission.co.uk/riio-t2-plan/

Reporter: Fiona Grahame