The British energy market regulator Ofgem has selected the project, which is set to become Britain’s longest submarine connection, as the first in its fast-track process and has provided it with a funding package worth £3.4 billion.
Eastern Green Link 2 (EGL2) is the first of 26 projects to complete the fast-track process to secure funding through Ofgem’s new Accelerated Strategic Transmission Investment (ASTI) framework, which speeds up the funding process by up to two years.
This decision represents the crucial final approval in the regulatory process and allows construction to begin this year. The link is expected to be operational in 2029 and will then be able to supply electricity to up to two million households.
The 2 GW high-voltage grid “Highway” The cable link will connect Peterhead in Aberdeenshire and Drax in North Yorkshire and will consist of 436 kilometres of submarine cable and 70 kilometres of land cable, as well as two converter stations at each end.
The project, jointly developed by Scottish and Southern Electricity Networks Transmission (SSENT) and National Grid Electricity Transmission (NGET), is considered to be the longest high-voltage cable in the UK and the largest investment in transmission infrastructure ever.
“Ofgem is committed to supporting the Government in achieving its targets of achieving clean electricity by 2030. Today’s announcement is another step in putting in place the regulatory systems and processes to accelerate grid regulation and achieve its goal,” said Jonathan BrearleyCEO of Ofgem.
“Accelerated Strategic Transmission Investment (ASTI) shortens approval timelines for projects like Eastern Green Link 2 (EGL2) by up to two years. However, streamlining the process does not mean blank checks for project developers, as we can intervene and make financial adjustments to maximize efficiency and benefit to consumers.”
Ofgem will publish a statutory consultation on the proposed changes to transmission system operator licensing conditions, which will formalise the decision in the coming weeks.
Ofgem also accelerated the settlement of the 2 GW Eastern Green Link 1 (EGL1) earlier this year and announced an interim £2 billion financing package.
Other ASTI projects
Ofgem has announced a proposed grant of £294.8 million for another project in its ASTI cohort, Yorkshire Green Energy Enablement (GREEN) project This is a proposed upgrade to the local electricity network to facilitate the transport of energy generated by wind farms in Scotland and the North Sea to consumers. It will involve the construction of new substations, underground cables, overhead lines and cable terminations. The proposed funding amount is subject to consultation with the project, which is currently scheduled to be operational by 2027.
In addition, Ofgem approved two applications for Early Construction Funding (ECF), which will enable project developers to apply for up to 20% of the total forecast project cost to fund early construction activities, including land purchases, early procurement purchases and preparatory works such as ground preparation.
The ECF applications were approved for the North London Reinforcement Project, which involves replacing existing 275 kV overhead lines with higher voltage 400 kV overhead lines, and Bulk transmission for Scottish Hydro Electricity Transmission (SHET) for six onshore and two offshore projects to increase electricity transmission capacity to transport more clean energy to where it is needed.
SHET’s package includes the 2 GW HVDC subsea link from Spittal to Peterhead and the HVDC link from Arnish to Beauly (Western Isles).
Ofgem has also launched consultations on ECF requests for the North West Wales (NWW) Reinforcement Project The aim of the project is to connect consumers in north-west Wales to a total of 5.48 GW of offshore electricity. This includes the new 700 MW Awel Y Mor offshore wind farm, an extension of the existing Gwynt Y Mor wind farm and the Norwich to Tilbury Project to modernise the local electricity transmission network required to connect to new power generation, including offshore wind farms.
The ASTI framework was developed and introduced in response to the previous UK government’s policy goal of connecting up to 50 GW of offshore electricity to the grid by 2030, as set out in the UK Energy Security Strategy of April 2022. If all projects are completed on their optimal dates, Ofgem expects a net benefit to consumers of up to £2.1 billion in terms of reduced costs and carbon savings.
