Ofgem Approve £1.1bn Moray Firth Subsea Cable Fund
The 100 mile cable plans to connect Caithness and Keith, while boosting renewable energy capacity in the region.
Ofgem has today approved £1.1 billion funding for a new subsea link in the north of Scotland.
The regulator’s decision is £105 million less than the funding request from Scottish Hydro Electricity Transmission (SHE Transmission) to ensure consumers pay no more than necessary.
The new link will connect 1.2GW of new renewable electricity generation following completion in 2018.
This additional capacity will increase the resilience of Britain’s energy infrastructure.
It will connect the electricity grid on either side of the Moray Firth.
A spokesperson for developer SSE said: “Scottish Hydro Electric Transmission, part of SSE plc, notes the decision announced by Ofgem this morning to allow £1,118 million (in 2013/14 prices) for the Caithness Moray transmission project.
"The allowed cost is £105 million less than SHE Transmission’s forecast cost of £1,223 million.
"Ofgem has also announced changes to the regulatory funding of uncertain costs that would allow SHE Transmission to increase its allowance for the Caithness Moray project during construction.
“The Caithness Moray transmission project is intended to release the potential for up to 1.2GW of new renewable generation in the far north of Scotland.
"SHE Transmission will now closely study the decision to assess whether the allowed costs and mechanism for recovering other future costs are, when taken together, adequate remuneration for the risks associated with the project.”
Commenting on the confirmation of funding by Ofgem to deliver a subsea electricity link between Spittal in Caithness and Blackhillock in Moray, SCDI’s Highlands and Islands Director Fraser Grieve commented:
“This is a welcome step in moving this important project forward and the delivery of this subsea link will provide the increased capacity and improved resilience needed to support new energy generation in the North of Scotland.”
“Whilst we recognise that the total funding confirmed is not as high as Scottish Hydro Electricity Transmission had applied for, we hope that the project is able to move forward and to be completed in 2018, helping to create jobs and greater economic prosperity.”