Energy regulator Ofgem signalled it was likely to approve up to £7.6bn of infrastructure investment to connect new Scottish wind farms and other renewable power generators to the UK grid.
Ofgem said on Monday it had fast-tracked proposals for infrastructure spending by energy companies ScottishPower and SSE and expected to make a final decision in April, following a consultation.
The investment will be paid for through energy bills and is likely to add 35p to a typical household bill each year from 2013 to 2021.
Ofgem said the proposals would “deliver essential upgrades to Scotland’s transmission network at the lowest cost to consumers”.
The proposed spending would “replace ageing infrastructure” and also “greatly assist connections to renewable generators”, Ofgem said.
It estimated that more than 1,500 jobs would be created as a result of the investment.
The £7.6bn announced on Monday is the first tranche of a new round of investment and is just a fraction of the total spending on grid infrastructure due to take place over the next decade.
A £30bn proposed investment by National Grid, which runs the electricity transmission network in England and Wales, is currently in the early stages of the approval process and has not been fast-tracked.
While the £30bn figure could yet rise or fall, spending roughly of that magnitude is likely to gain approval by the end of the year. Ofgem was unable to provide an estimate of how much household bills would increase in total as a result of the infrastructure spending. It could not say which costs related to bringing new renewable energy sources on to the grid and which related to upgrading existing networks.
The regulator has said a total of £200bn will need to be spent in the energy sector over the next decade to ensure the security of Britain’s supply.
ScottishPower, which accounts for £2.6bn of the proposed spending fast-tracked yesterday, said the investment would enable it to connect offshore and onshore wind generation in Scotland of around 11 gigawatts (GW) – enough to power more than 6m homes. It would also increase export capacity from Scotland to England from 3.3GW to 7GW by 2021.
Frank Mitchell, chief executive of ScottishPower Energy Networks, said: “This will be the most significant investment in electricity infrastructure to have taken place in the last 60 years.”
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