Ofgem has recently approved a 600-MW HVDC transmission link connecting Shetland to the mainland of Great Britain. The link is being taken forward by SSE plc's transmission business, Scottish and Southern Electricity Networks Transmission (SSEN Transmission).
The link will facilitate the connection of renewable electricity developments on Shetland, including SSE Renewables' 443-MW Viking wind farm which reached a final investment decision in June 2020. The link will also support Shetland’s future security of supply needs. It will connect Shetland to the main Great Britain electricity system for the first time and represents a material cost saving for consumers.
Approval is conditional on Ofgem being satisfied, by the end of 2020, that the Viking wind farm is likely to go ahead. SSE Renewables is engaging with Ofgem to provide satisfactory evidence as set out in the needs case consultation.
The link will enable a whole system approach to decarbonizing Shetland's economy and supporting the transition to low-carbon heat and transport. It will also allow Shetland's oil and gas sector to decarbonize its operational electricity requirements — a critical step in the transition to net-zero emissions. In parallel, SSE's distribution business, SSEN Distribution, is progressing plans for a cost-effective backup solution to support security of supply and will update stakeholders later this year.
These investments in renewables and electricity networks form part of SSE's £7.5 billion (US$9.5 billion) low-carbon investment program over the next five years.
With all necessary regulatory and planning approvals now in place, construction of the subsea link, all associated onshore transmission infrastructure, and Viking wind farm is expected to scale up in the coming weeks, providing an immediate boost to the green recovery from the coronavirus pandemic and supporting the United Kingdom and Scotland's commitments to net-zero emissions by 2050 and 2045 respectively.
Alistair Phillips-Davies, SSE's chief executive, said: "Ofgem's decision marks a significant milestone in delivering a 'whole system' solution to meet Shetland's future needs, as well supporting the transition to net-zero emissions, and shows again that we are putting our money where our mouth is on driving the green recovery.
"It has been a long journey, but with a combined investment in excess of £1 billion (US$1.3 billion), the construction of the subsea transmission link, all associated onshore infrastructure, and the Viking Energy wind farm will deliver substantial socio-economic and environmental benefits to Shetland's, Scotland's, and the United Kingdom's economy, supporting hundreds of skilled jobs in the process.
"This decision by Ofgem appropriately balances stakeholder interests. That's something we would hope to see Ofgem return to in its RIIO-T2 price control process, where we need a substantial increase in ambition from what's in the draft determination if we are to maximize our chances of delivering on net zero."
