Green light from Ofgem for 2 GW subsea electricity superhighway

UK energy market regulator Ofgem has greenlit the Eastern Green Link 1 (EGL1) electricity superhighway by awarding a £2 billion funding package for the construction of the project.

The 2 GW EGL1 HVDC multi-directional cable is being developed by National Grid Electricity Transmission (NGET) and SP Transmission, part of SP Energy Networks, between the Torness area in East Lothian, Scotland, and Hawthorn Pit in County Durham, England. 

The vast majority of the 196-kilometer cable will be under the North Sea, with the remaining 20 kilometers of cables underground linking the cable to substations and converter stations.

EGL1 is the second of 26 critical energy projects, worth an estimated £20 billion to complete Ofgem’s new fast-track Accelerated Strategic Transmission Investment (ASTI) framework, which speeds up the funding process for projects by up to two years.

“Today’s announcement takes us another step closer to achieving Great Britain’s 2030 Clean Power ambitions. It means customers can reap the benefits of abundant homegrown wind faster, while also being increasingly shielded from volatile imported gas prices,” said Beatrice Filkin, Ofgem Director of Major Projects.

“Our fast-track process provides developers with access to some initial upfront funding from the projected budget, so they can secure the supply chain commitments needed to secure the sought-after materials to deliver this project as soon as possible. However streamlining our process does not mean we’ve handed a blank cheque to the developers. We’ve built in safeguards which mean we can step in where needed to ensure they deliver maximum efficiency and benefit to customers.”

National Energy System Operator’s (NESO) recent Clean Power 2030 Report has shown that the project will deliver annual savings of over £870 million by reducing the need to compensate British wind generators who are currently asked to turn off production during times of high wind due to lack of grid capacity, in turn helping drive down consumer bills.

Furthermore, Ofgem has identified over £43 million of savings which have been cut from the project costs without impacting delivery or quality. Communities that host the infrastructure in Scotland and North-East England are also set to benefit from a £7.9 million social value and community benefit fund.

At the end of 2023, Italian cabling giant Prysmian won a €850 million contract for EGL1, while the consortium of GE Vernova’s Grid Solutions business and MYTILINEOS Energy & Metals secured a contract worth around €1.2 billion to deliver the HVDC converter stations for the project.

Four EGL links form part of planned electricity grid reinforcements to boost the capability of the existing UK transmission network and facilitate increased flows of planned renewable generation in the North to demand centers to the South, supporting the ambition of enabling 50 GW of offshore wind generation by 2030 and achieving a net-zero economy by 2050.

Construction recently started on Eastern Green Link 2 (EGL2).

Earlier this week Ofgem approved five new undersea energy links, with two creating Great Britain’s first-ever offshore hybrid assets (OHAs), all expected to be operational by the end of 2032.