Ofgem Approves Updated Delivery Dates and Early Investment for Three Proposed Projects
Ofgem has approved updated delivery dates and early investment for three major projects which will help boost Great Britain’s energy security and clean power ambitions and deliver projected savings for consumers.
- Eastern Green Link 3 (EGL3) and Eastern Green Link 4 (EGL4) are two proposed subsea cables which are expected to each provide 2 GW of capacity to transport electricity generated from British offshore wind between Scotland and England through a network of onshore and offshore cables
- Another proposed project GWNC, plans a new onshore 400 Kv electricity link between Grimsby and Walpole in Lincolnshire, to help transport the energy to consumers
A Cost Benefit Analysis (CBA) by grid operator NESO indicated that the redesigned projects are expected to deliver a $3.99-7.98 billion benefit to consumers as compared to the original network design due to the earlier achievable delivery dates and avoided network constraint costs. The proposed projects include building high-capacity, electricity transmission links to enable consumers to access more homegrown clean power, with the additional capacity provided by the links also reducing payments made to windfarms to switch off, when there is no capacity to transport their energy on the grid.
Ofgem has approved amendments to the scope of the projects, including forecast costs and later target delivery dates, after Transmission Operators (TOs) proposed major design changes to reduce the impact of the projects on the local environment and ensure additional renewable generation to be connected.
Following the assessment of the extensive redesign of the projects, Ofgem have set new target dates of December 2033 for GWNC and August 2034 for EGL3 and EGL4. Before the changes there was a risk of TOs not delivering the projects until the late 2030s. TOs will be incentivized for delivering the projects earlier than these dates, but any late delivery will result in payments for penalties for each day the project is delivered late.
The projects are expected to deliver greater consumer benefits as compared to their original designs, in the form of reduced constraint costs through timely delivery, connection of additional homegrown clean power and reduced community and environmental impact, which includes proposals for underground cables on parts of EGL3 and EGL4, thus reducing the impact of new overhead lines. Ofgem has also approved early construction and preconstruction funding (ECF and PCF) for EGL3 and EGL4, which will enable for the projects to proceed with enabling works such as strategic land purchases, surveys, design work and procurement of sought-after components, equipment and materials.
“Our processes help minimize wasted expenditure, if projects are altered, cancelled or refused permission, with any unspent money returned to consumers,” said Beatrice Filkin, Ofgem Director of Major Projects. “The TOs must also demonstrate that their expenditure delivers clear benefits for consumers – otherwise those costs can’t be passed on to billpayers.”
