- Ofgem approves £3.4 billion grid investment
- Project will transport renewable energy across the UK
- Expected to save £1.5 billion in first 5 years
Billions must be invested in the electricity infrastructure to enable it to transport renewable energy from one part of the country to another.
The energy regulator announced the approval of the largest electrical grid investment in British history, clearing the path for an electricity superhighway.
According to Ofgem, the £3.4 billion project will transfer electricity from Scotland to Yorkshire, promoting offshore wind growth and powering two million households and businesses for one hour.
It will include 436 km of subsea cable and will cost £4.3 billion when inflation is taken into account.
Currently, energy providers are compensated to stop producing electricity when the network is overloaded, but this grid extension will lessen the requirement for power-down requests, saving £1.5 billion over the first five years of operation beginning in 2029.
Building the grid of the future.
New infrastructure, such as the Eastern Green Two motorway, is required to create a national electrical grid that transports electricity from where it is generated – frequently off the coast of Scotland – to densely populated areas where it is mostly used.
Prior to the advent of renewable energy, electricity was generated by fossil fuel-powered plants near coal fields in the Midlands.
Ofgem’s fast-track funding process for offshore wind includes 26 “critical” energy projects, the superhighway being the first. The second project, Eastern Green One, has gained provisional permission and is anticipated to be approved in the following weeks.
Under expedited finance plans, Ofgem claims it can approve required grid expenditures two years faster than previous infrastructure proposals.
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Ofgem’s chief executive, Jonathan Brearley, stated: “Streamlining the process does not mean blank cheques for developers because we can step in and make financial adjustments to maximise efficiency and consumer benefit.”
The Labour government aims to make Britain a renewable energy superpower by 2030 while also lowering reliance on gas markets, which will demand system improvements.
Today’s statement is another step towards putting in place the regulatory structures and processes needed to accelerate network regulation and achieve its goal, according to Mr Brearley.
The National system estimated in March that over £60 billion is required to create the future energy system in order to reach climate change mitigation targets in just over ten years.
According to industry minister Sarah Jones, grid projects might provide “thousands of good jobs”.
It is part of our strategy to minimise our reliance on fossil fuel imports, protect taxpayers, increase Britain’s energy independence, and speed our journey to net zero.
