Ofgem Likely to Approve SSE's Shetland Plan, Reject Western Isles Proposal
March 19 2019 - 3:57AM
Dow Jones News
By Adam Clark
U.K. energy regulator Ofgem said Tuesday that it expects to
approve a proposal by SSE PLC (SSE.LN) to build a
electricity-transmission link in the Shetland Islands but will ask
the energy company to rethink its plan for the Western Isles.
Ofgem said it is minded to approve the 709 million-pound ($940
million) plan for a 600 megawatt subsea link to export wind power
from Shetland to mainland Scotland and the rest of Great
Britain.
The regulator will consult on approving the link, subject to the
Viking Energy Wind Farm on Shetland being awarded U.K. government
subsidies.
However, Ofgem said it is minded to reject SSE's GBP663 million
plan for a 600 megawatt link from the Western Isles to the mainland
due to the risk of consumers paying for a "significantly
underutilized" connection.
The regulator said it would support an alternative proposal with
different funding options, which could be 600 megawatts or 450
megawatts.
Ofgem said the costs of building the 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.
Write to Adam Clark at adam.clark@dowjones.com;
@AdamDowJones
(END) Dow Jones Newswires
March 19, 2019 03:42 ET (07:42 GMT)
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