Ofgem has said it is “unable to approve” SSE Network’s current plans for a £709m subsea electricity link from Shetland to the Scottish mainland.
SSE’s proposal for the 600MW link would allow new windfarms on the island to export electricity to the UK.
However the energy regulator, who in March said was minded to approve the plans, has told SSE to go back to the drawing board after planned Shetland wind projects failed to win subsidies in a recent government auction.
It also rejected a similar plan for the Western Isles on the same basis which it had previously said it was minded not to approve.
Ofgem said it would welcome revised proposals from SSE “providing greater certainty on the future of the windfarms that underpin the need for links”.
SSE said it remains “very confident” that both links remain “the most economic and efficient solutions for each island group” and that it is now “critical” parties come together to provide Ofgem with the information it needs.
It added that any success will depend on developers showing that projects will progress to demonstrate the need for the transmission links.
The Shetland proposals were based on the largest planned development, Viking Energy Wind Farm, securing support from the government.
However at last month’s Contracts for Difference Auction it failed to secure subsidies, although the firm behind it has remained committed to developing the project.
In March Ofgem also said it was not minded to approve proposals for a similar link for the Western Isles and said today it is “unable to approve” the 600MW plan.
It was also based on the two largest planned projects winning subsidies – Stornoway and Uisenis Wind Farms – but only one was successful in the latest auction.
The regulator said it “encourages SSEN to submit revised proposals for both transmission links, including establishing more certainty for consumers that the windfarm projects will go ahead”.
Ofgem added that it is engaging with the firm on securing “evidenced and realistic proposals” from them on the projects.
SSE’s managing director for transmission, Rob McDonald, said: “We welcome Ofgem’s continued commitment to provide a way forward for both the Shetland and Western Isles transmission links and allow the determination of the Needs Cases.
“It is now critical that all parties work together to provide the information Ofgem require at the earliest possible opportunity. Ultimately, a successful outcome will depend on renewable developers on both island groups demonstrating that sufficient generation will progress to underpin the transmission investment cases.
“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.”
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