National Grid and SSE hail regulator's approval of investments in offshore wind

National Grid and SSE hail regulator's approval of investments in offshore wind

Proactive Investors - National Grid PLC (LON:NG.) and SSE PLC (LON:SSE) both hailed the decision from regulator Ofgem to confirm how it plans to support delivery of the government's renewable electricity targets, though both said that reforms were still needed to support developments.

Ofgem’s Accelerated Strategic Transmission Investment (ASTI) framework aims to streamline the onshore transmission approval process, while the watchdog also released an update on its new pilot programme for Multiple Purpose Interconnectors (MPIs), subsea electricity cables able to connect Britain to neighbouring markets and also connecting offshore generation to shore.

National Grid Electricity Transmission (NGET) will be responsible for the delivery of 17 major onshore electricity transmission projects.

With the UK government having set a target of connecting up to 50GW of offshore generation to the electricity network by 2030, SSE’s Scottish and Southern Electricity Networks (SSEN) noted that a handful of its transmission projects were required to meet the offshore wind targets and will now be taken forward as part of the ASTI framework.

These include subsea high-voltage direct current (HVDC) links that will be taken forward as joint ventures with NGET, as well as others connecting to Peterhead and Inverness, plus onshore reinforcements and the uprating of an existing line.

SSE noted that Ofgem confirming these reinforcements will be exempt from competitive ownership proposals being considered as part of the draft Energy Bill, “has provided the much-needed certainty required to support timely and accelerated delivery, including early supply chain engagement”.

National Grid, which last month said meeting the country’s renewable energy goal would require it building seven times as much infrastructure over the current decade as it in the past three, said the planning system “needs streamlining to allow for the delivery of this critical national infrastructure in a timely fashion” and communities “must see clear long-term economic benefit to hosting infrastructure”.

Rob McDonald, managing director at SSEN Transmission, said through the ASTI framework Ofgem is approving the need for the investments required to deliver 2030 offshore wind targets.

“Accelerating the development and delivery of the strategic electricity transmission infrastructure required to enable the deployment of homegrown and affordable, low carbon power, is arguably the most important enabler to securing the UK's future energy security and net zero ambitions. This includes unlocking the first phase of the ScotWind leasing round, supporting UK and Scottish Government targets.”

National Grid said: “We welcome the clarity and commitment that this decision gives NGET, and the wider industry, as the next step towards a more affordable, resilient and clean energy system.

“Whilst this investment is fundamental to the successful delivery of the decarbonisation of our electricity system, it will also bring greater security of supply, as well as improved affordability for customers in the long run.”

Shares in NG and SSE fell 1% and 0.5% respectively on Thursday amid a wider blue-chip sell-off.

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