Ofgem fast-tracks £7bn Scottish network upgrade

Ofgem is consulting on a £7billion upgrade of Scotland’s high voltage network up to 2021. The regulator is fast tracking two investment projects by the electricity transmission businesses of SSE […]

By Vicky Ellis

Ofgem is consulting on a £7billion upgrade of Scotland’s high voltage network up to 2021. The regulator is fast tracking two investment projects by the electricity transmission businesses of SSE and ScottishPower, it announced yesterday.

These are ScottishHydro Electric Transmission Ltd (SHETL) and SP Transmission Ltd (SPTL) and could be worth a total of £4bn and £2.6bn respectively over the course of the eight-year-long upgrade.

The projects fall under Ofgem’s new industry framework, called RIIO (Revenue=Incentives+Innovation+Outputs) which offers “strong incentives and penalties” to get UK utilities to invest £30billion in improving the network.

Hannah Nixon, who is heading the RIIO price control process for Ofgem said: “Both companies have embraced the new RIIO process and understood its importance in addressing the question of how best to meet future energy demands at the lowest cost to consumers.

“Their business plans provide good evidence of how the companies will deliver significant benefits to consumers through greater efficiency, enhanced consumer engagement and investment.”

Mark Mathieson, SSE’s managing director welcomed the news for establishing “an overall positive investment climate”, while CEO of ScottishPower said the agreement will give “best value for customers, whilst guaranteeing a modern and robust electricity system.”

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