9th April 2020
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Ofgem approves cable funding proposal from SSEN

The proposed inter-connector cable linking Shetland to the mainland has edged closer to reality, with energy regulator Ofgem approving a proposal from Scottish and Southern Electricity Networks (SSEN) to make a major £251 million contribution towards the link.

SSEN – the distribution system operator for the isles – has been working to identify the future security of supply for Shetland, as preparations are made to replace the antiquated diesel-powered Lerwick power station, which is expected to cease full duty operations in 2025.

The proposal will see SSEN provide a financial contribution towards the proposed transmission cable, which promises to secure Shetland’s future security of supply “at the lowest cost” to consumers.

SSEN says a saving around £140 million can be achieved when compared to the cheapest alternative market-based solution.

In response to Ofgem’s decision, SSEN is also promising to progress preparation of the Shetland “standby arrangements” which will complement the transmission link.

It is hoped the decision will provide Shetland’s renewable developers clarity about future network charges, helping them make investment decisions and provide the evidence required by Ofgem for the regulator to approve the proposed transmission link to the Shetland Isles.

Commenting on today’s decision, Colin Nicol, Managing Director for Networks, said: “We welcome today’s decision by Ofgem to approve our whole system solution for Shetland, which is a positive step toward meeting Shetland’s electricity needs at a much lower cost to energy consumers than alternative options.

“The proposal will support future security of supply as well as unlocking Shetland’s renewable potential. Once built, the transmission link and the low carbon output from renewable generators on Shetland will also help support the electricity needs of Shetland’s oil and gas industry and its wider economy.

“Our transmission business will shortly re-submit to Ofgem an updated Needs Case for the Shetland link and we look forward to working with Ofgem and Shetland developers to progress this proposal in a timely manner.”

4 comments

  1. John Tulloch

    Funny how things like this are announced during the few days between the General Election and Christmas.

    Last we heard was renewable energy developers crying their eyes out that the proposed 600MW cable was inadequate for all the wind farms they want to build on Shetland.

    “Follow the money”. So-called “contributions” from SSEN’s customers and bigger cables with more generation lead to a reduction in the price of VE’s next bid in a renewable energy auction.

    Who would bet against SSEN’s revised “final needs case” proposing an even bigger capacity cable, enabling even more and bigger wind farms to be built?

    Reply
  2. George Karstein Irvine

    Commenting on today’s decision, Colin Nicol, Managing Director for Networks, said: “We welcome today’s decision by Ofgem to approve our whole system solution for Shetland, which is a positive step toward meeting Shetland’s electricity needs at a much lower cost to energy consumers than alternative options.

    Does this statement mean that the average shetland family would be able to obtain electricity cheaper on the commissioning of the project ?

    Would it be possible if the turbines were commissioned prior to the connector cable being commissioned then could the power be made available locally at reduced pricing ?

    Reply
  3. Peter Hamilton

    This looks like so much greenwash and so many weasel words to a community whose council has a vested interest in rolling over and playing dead.

    What exactly are we to read into “meeting Shetland’s energy needs at a much lower cost to energy consumers”? There is an implied promise there, and even a threat, but no actual guarantee of cheaper bills for local residents.

    As for “unlocking Shetland’s renewable potential”, this looks like code for unlocking their potential to exploit the landscape and the people through environmentally harmful proposals the people will get no say in.

    Shetland remains in thrall to the notion that all potential economic activity is necessarily a positive development. Some developments however represent an approach to development that dlsempowers, robs folk of a say and foists solutions onto them that do not address their problems or needs.

    There will be opportunities for some to profit no doubt, but is is hard for the council to dispassionately manage partnership with these far larger players when they are so wowed by the prospect of cash flowing into the reserves through ground rent to the Busta estate.

    The SIC will do diddlysquat to ensure local concerns are considered.

    Reply
  4. James Mackenzie

    I do wonder what those who think wind energy is the green way forward for Shetland think about the irony of it being used to power more fossil fuel production?

    Reply

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