Ofgem green lights early construction funding for key energy projects

These projects are upgrading Scotland’s electricity network so more clean, homegrown power can reach homes and businesses: a new Denny to Wishaw power line will carry enough renewable electricity to supply around 1 million homes, upgrades between Tealing and Kincardine will boost capacity and support major new links like electricity “superhighways”, and early funding for eight further projects means work can start sooner, helping reduce delays and bring reliable, low-carbon energy to consumers faster.

The projects are being progressed under Ofgem’s Accelerated Strategic Transmission Investment (ASTI) programme, launched in 2022 to accelerate delivery of key power transmission projects. ASTI projects will help meet the Government’s clean power targets, reduce reliance on volatile foreign energy markets and give British consumers access to more homegrown energy.

The new transmission capacity these projects will deliver will also generate consumer savings by reducing the amount of constraint costs currently added to bills, when wind farms are paid not to generate, due to lack of grid capacity.

The decision means Ofgem has now granted early funding to all 26 projects in the ASTI programme.

ECF is used by Transmission Operators (TOs) to finance early procurement of highly sought after materials such as substation components and HVDC cables, as well as strategic land purchases and associated enabling works including design work, surveys and early construction activities.

This gives Great Britain a critical edge in the global race to secure key components at a time when many other countries are also seeking to decarbonise their grids, which helps reduce the risk of costly procurement delays.

Subject to planning consents, and construction programmes running to time, the projects are expected to proceed at pace with a view to start delivering benefits to consumers by 2030.

Beatrice Filkin, Ofgem’s director of major projects, said: “The last few years have shown how quickly global events can result in energy price shocks which push up bills for British consumers.

“By unlocking early funding for these projects, we aim to accelerate their delivery. This is crucial for strengthening Britain’s energy security and cutting constraint costs and exposure to volatile international gas prices by providing more grid capacity.

“Early funding helps transmission operators secure scarce components, avoid supply-chain delays, and deliver the grid upgrades needed to power homes and businesses with more clean, homegrown energy.”

She added: “However, this isn’t planning consent for the schemes which will be considered by the relevant planning authorities. As financial regulator of these projects, we’ll protect consumers by ensuring any early spend is targeted, any unused funding is returned, and costs can only be recovered where there’s a clear benefit for billpayers.”