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Scotland leads high voltage upgrade

UK Government consultations are fast-tracking private investment in the upgrade of the National Grid

The network upgrade will replace current electrical infrastructure across the UK
The network upgrade will replace current electrical infrastructure across the UK, starting with Scotland

Britain is being rewired, starting with Scotland. Over £7bn has been earmarked for an upgrade of Scotland’s high voltage network by 2021, which will see the nation’s infrastructure rewired.

In the initial phase, the UK government’s Office of the Gas and Electricity Markets (Ofgem) is consulting on proposals of a £2.9bn of investment to upgrade Scotland’s grid network. A further £4.7bn of investment will be made available for future projects under this scheme. Over 1,500 jobs are estimated to be created as a result of the works.

Ofgem has also introduced a new price control framework, RIIO (Revenue using Incentives to deliver Innovation and Outputs). The aim of RIIO is to ensure fair prices for consumers while Britain’s power grid is upgraded and ageing infrastructure is replaced.

The first companies to be fast tracked under these new price control frameworks outlined in RIIO are SP Transmission Ltd (SPTL) and Scottish Hydro Electric Transmission Ltd (SHETL). It is hoped that “fast-tracking” these companies will reduce administrative hurdles and deliver more efficient services for consumers.

Alistair Buchanan, Chief Executive Officer at Ofgem stated that: “This is a very significant moment for three reasons. Firstly, it forms a key part of implementing the £200bn investment identified in Project Discovery to protect our security of supply.

“Secondly, the upgraded network will greatly assist connections to renewable generators. Finally, our brand new RIIO model to setting price controls shows how we are cutting red tape.

“This announcement provides good value for consumers, delivering essential upgrades to Scotland’s transmission network at the lowest cost to consumers.”

The Senior Partner in charge of the RIIO price control process, Hannah Nixon, commented: “Both companies have embraced the new RIIO process and understood its importance in addressing the question of how best to meet future energy demands at the lowest cost to consumers.

“Their business plans provide good evidence of how the companies will deliver significant benefits to consumers through greater efficiency, enhanced consumer engagement and investment. The fast-tracked companies can now benefit from the swiftness of the process and concentrate on delivering efficient network improvements for consumers.”

Nixon added: “Last year we agreed that consideration of transmission investment in England and Wales by National Grid would be handled in the spring and summer of 2012. We are pleased to confirm that National Grid – which has presented business plans worth around £30 billion – has continued to engage positively with both stakeholders and Ofgem.”