Ofgem seeks cost revision to 1.2GW UK transmission cable

The British energy regulator Ofgem has put forward a revised funding plan for a new subsea transmission link designed to connect 1.2GW of new renewable electricity generation in Scotland by 2018, claiming that the existing project cost proposal is unjustified.

Earlier this summer, Ofgem approved Scottish Hydro Electric Transmission (SHE Transmission)’s plans for a subsea link between Caithness and Moray in Scotland based on a £1.24bn funding package ( see EDEM 11 July 2014 ).

But the energy regulator has now opened a consultation to a revised funding plan that would reduce the cost of the project to £1.06bn – 15% cheaper than SHE Transmission’s original request.

Among the greatest efficiencies Ofgem believes the project can make, concerns the current level of staff resourcing, which it proposes to streamline by 38.1%.

SHE transmission responded by expressing its disappointment in the level of allowances proposed by Ofgem.

“SHE Transmisison believes that it has produced a well defined and well scoped project that offers value for money for customers,” parent company SSE said in a statement.

But the company appears to be open to a discussion that will reach common ground on assessing the costs of construction.

“The consultation does enable further engagement with Ofgem to take place on important issues, such as the best way for treating contingency- and risk-related costs,” the statement said, adding that SHE Transmission would ‘engage constructively’ in the consultation.

A final decision on funding will be made in December, following the conclusion of the consultation. Henry Evans