Ofgem Announces £1.1 Billion Transmission Subsea Link
British energy regulator Ofgem announced Monday its plans to allow £1.1 billion in funding for a new subsea transmission link in the north of Scotland to connect 1.2 GW of renewables capacity to the grid.
The plan calls for a new subsea cable to be installed under the Moray Firth — an inlet of the North Sea in the northeast of Scotland — with an expected completion date sometime in 2018.
According to Ofgem, the “additional capacity will increase the resilience of Britain’s energy infrastructure.”
The regulator launched their investigation of Scottish Hydro Electricity Transmission’s (SHE Transmission) original proposal earlier this year, but their assessment found that SHE Transmission’s original project cost of £1,236.2 million was too high, approving £1,062.3 million instead — £173.9 million less.
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The UK newspaper The Telegraph reported that the consultation found Scottish Hydro Electricity Transmission’s parent company, energy giant SSE, was attempting to pass millions of pounds in unnecessary costs on to consumers by appointing too many overpaid staff to work on the project.
“While SHE Transmission is disappointed with the level of the allowances proposed today, 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,” said a spokesperson for SSE.
According to the official consultation (PDF):
Our consultants carried out a line by line review of the resourcing role profiles. This analysis suggested there is excessive monitoring of contractors, some duplication of roles, over allocation of staff, and high average day rates.
While the project will now be able to move forward, SSE is understandably disappointed, while the taxpayers are probably somewhat relieved at Ofgem’s findings.
Image Credit: Moray Firth by Duncan Brown (CC BY-NC-SA 2.0)
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