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Ofgem announces funding plans for new subsea transmission link

Ofgem has announced a spending plan for a £1 billion pound Caithness Moray transmission subsea link. The subsea link will be built in Scotland, however, Ofgem says that the funding it has proposed is for significantly less than the amount requested by Scottish Hydro Electricity (SHE) Transmission as they want to ensure that consumers get value for money. She Transmission had anticipated costs of £1,236.2 million, however, following an assessment from Ofgem, the energy watchdog reduced the costs down to £1,062.3 million.

The SHE Transmission project will involve the creation of a high-voltage direct current that will stretch from Caithness to Morayshire; there will also need to be work carried out onshore.

Ofgem says that the link will help to improve the resilience of Britain’s energy infrastructure.  The new subsea link will be completed by 2018 and will provide 1.2 gigawatts of renewable energy.  

Consultation Period

There are some concerns over how much the project could cost in its entirety and the public are being invited to give their views on the funding plan before Ofgem can give the proposals the final approval. Ofgem gave initial approval for the project in July, but now a more extensive consultation period will be necessary before Ofgem can give the proposals final approval.

Consumers are invited to contribute to the consultation process, the process assessment, and the efficiency savings, and they have until November 24th to do this. Once the consultation period has closed, a decision on the final amount of funding will be made.

Ofgem are due to make a final decision on the subsea transmission by the end of 2014; the final expenditure will also be announced by the end of the year.

Lincs Wind farm

Ofgem has also recently announced a licence worth more than £300 million for a wind farm in Lincs. The license will allow TC Lincs OFTO Limited to own and operate a wind farm in Lincs.

The license was granted under the offshore regulatory regime, which is a collaboration between the Department of Energy and Climate Change and Ofgem. The regime was first introduced in2009 and uses a process of competitive tendering to license offshore electricity transmission.

The Lincs wind farm is owned by DONG Energy, Centrica and Siemens Project Ventures. The Lincs wind farm is located in Skegness and has the capability to produce enough green energy to power 200,000 homes.

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