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UK energy regulator approves $2.5 billion funding for new subsea cable
Global Banking & Finance Review®
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By Yadarisa Shabong
(Reuters) -British energy regulator Ofgem has approved a 2 billion pounds ($2.5 billion) funding package to build nearly 200 kilometres (124 miles) of new subsea and underground cables linking Scotland to the north-east of England, it said on Friday.
The Eastern Green Link 1 (EGL1) project will reduce Britain’s reliance on volatile international gas markets by further harnessing the power of North Sea wind and will play a key role in achieving Britain’s 2030 clean power goal, the regulator said.
EGL1 aims to power more than two million homes across Britain and Ofgem said it could help consumers save more than 870 million pounds in bills annually by cutting the need to compensate British wind generators due to lack of grid capacity.
The project that will be built by a consortium formed by Iberdrola’s ScottishPower Energy Networks and National Grid Electricity Transmission is currently nearing the end of the development phase and construction is scheduled for 2025.
The new connection is anticipated to be operational in 2029.
Ofgem said its fast-track process would give developers access to some initial upfront funding from the projected budget so they can secure supply chain commitments.
“However, streamlining our process does not mean we’ve handed a blank cheque to the developers. We’ve built in safeguards,” Ofgem Director of Major Projects Beatrice Filkin said in a statement.
Of the 196 kilometres of cables, most will be under the North Sea and the remaining 20 km underground linking the cable to substations and converter stations in Scotland and England.
Iberdola last year said the first contracts worth 1.8 billion pounds were awarded to the world’s largest cable maker Prysmian Group, which will supply almost 400 km of power cable, and energy equipment makers GE Vernova and MYTILINEOS Energy & Metals, which will provide two High-voltage direct current substations, one at each end of the cable.
($1 = 0.7891 pounds)
(Reporting by Yadarisa Shabong in Bengaluru; Editing by Varun H K and Mark Potter)
Ofgem is the Office of Gas and Electricity Markets, the regulator for the electricity and gas markets in Great Britain, ensuring that consumers receive a fair deal.
Renewable energy is energy generated from natural resources that are replenished naturally, such as solar, wind, and hydroelectric power.
The Eastern Green Link 1 project aims to build subsea and underground cables to connect Scotland with the north-east of England, enhancing energy supply.
The 2030 clean power goal is part of the UK's commitment to reduce carbon emissions and transition to a more sustainable energy system.
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