SSE's GBP1.33 Billion Proposals Fail to Win Subsidies for Transmission Links: Ofgem -- Update
October 23 2019 - 12:14PM
Dow Jones News
By Adria Calatayud and Adriano Marchese
--SSEN has made a proposal to address the regulator's
concerns
--The company remains confident of its proposal as the most
economic and efficient solution
The U.K. energy regulator said Wednesday that SSE PLC's (SSE.LN)
1.33 billion-pound ($1.72 billion) proposals failed to win
subsidies for the Shetland and Western Isles transmission links to
mainland Scotland in a recent government auction.
Ofgem said it encouraged Scottish and Southern Energy Networks,
a subsidiary of the FTSE 100 energy company, to submit revised
proposals that provide greater certainty on the future of wind
farms that support the need for these links. The company's current
proposals failed to meet conditions for approval, Ofgem said.
However, SSEN said that it remains "very confident" that the
proposed links remain the most economic and efficient solutions for
each island group, and added that SSE has made a proposal to Ofgem
to address the regulators concerns that consumers may be paying for
a potentially oversized link.
Managing Director for SSEN Transmissions Rob McDonald said: "We
will now work with all parties to provide all necessary information
with the upmost urgency to ensure any delays to the process are
kept to an absolute minimum and to help provide the island links
the best chance of success."
The regulator said it was unable to approve SSEN's plan to build
a 600 megawatt subsea electricity transmission link to mainland
Scotland from Shetland as the project was based on a wind farm
securing subsidies from the U.K. government. The wind farm failed
to get those subsidies in last month's auction, Ofgem said.
In March, Ofgem said it was minded to approve the estimated
GBP709 million link.
For the Western Isles, Ofgem said it was unable to give green
light to SSEN's proposal to build a 600 megawatt transmission,
GBP623 million link to connect them to mainland Scotland. Only one
of the two wind-farm projects that supported the link received
subsidies from the U.K. government.
Write to Adria Calatayud at adria.calatayudvaello@dowjones.com
and Adriano Marchese at adriano.marchese@wsj.com
(END) Dow Jones Newswires
October 23, 2019 11:59 ET (15:59 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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