Ofgem launches consultation on costs of new Shetland energy solution

Ofgem, the energy regulator, has launched a consultation to seek views on the costs of the proposed new energy solution for Shetland.

This follows a formal recommendation put forward in June this year by network operator, Scottish and Southern Electricity Networks (SSEN), operating as Scottish Hydro Electric Power Distribution (SHEPD) under licence.

After an extensive consultation and a comprehensive competitive tender process, SSEN confirmed its preferred bid to be a proposal by National Grid Shetland Link Ltd and partner Aggreko UK Ltd which combines a 60MW High Voltage Direct Current (HVDC) subsea cable link to the GB electricity network, alongside on-island backup generation.

In line with the agreed regulatory process, SSEN has made a formal recommendation to the energy regulator, Ofgem, to approve the proposal.

As part of its decision-making process, Ofgem will be hosting a series of public consultation events in a number of locations across Shetland on 16 and 17 August in Lerwick, Brae and Yell:

Wednesday 16th August
Shetland Museum & Archives, Lerwick
13:00-15:00 and 17:00-19:00

Thursday 17th August
Yell Leisure Centre, Mid Yell

Thursday 17th August
North Mainland Leisure Centre, Brae

Representatives from Ofgem, SSEN, National Grid Shetland Link Ltd and Aggreko UK Ltd will be in attendance to answer any questions on the day. All are encouraged to attend to learn more about the new energy solution and share views on the regulatory arrangements.

The proposed 260km link will run from Dounreay in Caithness to Scalloway on Shetland’s Mainland with a further underground cable to Gremista, near Lerwick, where back-up generators are to be housed. If approved, and once operational, the link is expected to provide a reliable electricity network supply for Shetland.

If regulatory approval is granted, the new energy solution is expected to be operational by the end of 2020. In the intervening period, all Shetland’s electricity needs will continue to be met from existing generation sources on the islands, including Lerwick Power Station, which will remain operational until such time that the new energy solution is established.

SSEN’s transmission business, Scottish Hydro Electric Transmission plc, is also developing proposals for a HVDC transmission connection to the main GB transmission system in response to the potential need to provide connections to large scale renewable developments on Shetland. This proposal is unaffected by the new energy solution tender and SSEN continues to await the outcome of a UK Government consultation on the treatment of non-mainland onshore wind before it will be in a position to progress the development of the transmission link.

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Van on rural road

Scottish and Southern Electricity Networks

We're responsible for maintaining the electricity networks supplying over 3.7 million homes and businesses across central southern England and north of the Central Belt of Scotland. We own one electricity transmission network and two electricity distribution networks, comprising 106,000 substations and 130,000 km of overhead lines and underground cables across one third of the UK. Our first priority is to provide a safe and reliable supply of electricity to the communities we serve in Scotland and England.

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