SSE Calls on Ofgem to Reconsider Decision over Western Isles Link -- Update
March 19 2019 - 08:03AM
Dow Jones News
--SSE has called on energy regulator Ofgem to reconsider its
provisional decision not to approve a 600 megawatt transmission
link from the Western Isles to mainland Scotland.
--Ofgem said it had concerns the link may not be fully utilized
and suggested SSE could plan for a lower capacity, although it is
set to approve a similar project for the Shetland Islands.
--SSE said the larger link would be an economic solution and
downsizing the plan could hinder its delivery.
By Adam Clark
SSE PLC (SSE.LN) has rejected a suggestion from U.K. energy
regulator Ofgem to downsize its 663 million pound ($879 million)
plan for an electricity link between the Western Isles and mainland
Scotland.
Ofgem said Tuesday that SSE's proposal for a 600 megawatt link
from the Western Isles could leave consumers paying for a
"significantly underutilized" connection. The regulator said it
could support a proposal with alternative funding or a 450 megawatt
link.
SSE called on Ofgem to reconsider the provisional decision,
saying the larger capacity link would be an economic solution and
allow for additional renewable-energy projects.
"A 450MW link would be short sighted, limiting the potential for
community schemes to benefit from renewables expansion. Moving to a
450MW at this late stage also introduces risks and uncertainty
which, in turn, could impact on the delivery of a transmission link
to the Western Isles," Colin Nicol, managing director for Scottish
and Southern Electricity Networks, said.
However, SSE welcomed Ofgem's statement that it was minded to
approve a GBP709 million plan for a 600MW subsea link from the
Shetland Islands to the mainland. The regulator will consult on
approving the link, subject to the Viking Energy Wind Farm on
Shetland being awarded U.K. government subsidies.
Ofgem said the costs of building both links could be reduced
significantly and it may use a competition-proxy model to set the
revenue SSE can earn. The regulator will make a decision on the
business case for both links in mid-2019.
SSE said it has "significant concerns" over the use of an
untested competition model and it is considering all options to
address Ofgem's concerns.
Write to Adam Clark at adam.clark@dowjones.com;
@AdamDowJones
(END) Dow Jones Newswires
March 19, 2019 08:48 ET (12:48 GMT)
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