Revamp of UK Grid to Meet Renewable Targets to Cost $6.51 Billion, Study Says

Upgrades to the UK power grid to accommodate 45 GW of new power generation by 2020 will require an investment of about £4.7 billion ($6.51 billion), according to a report released last week by the Electricity Networks Strategy Group (ENSG).

That group, along with three UK grid operators—National Grid, Scottish Hydro Electric Transmission, and Scottish Power Transmission—prepared the report “Our Electricity Transmission Network: A Vision for 2020” (PDF), for the UK Department of Energy and Climate Change (DECC) and UK electricity and gas regulator Ofgem. ENSG is jointly chaired by DECC and Ofgem.

ENSG and the three companies had been commissioned to develop electricity generation and demand scenarios consistent with the EU’s target requiring the UK to produce 15% of its energy from renewable sources by 2020. The study also identified and evaluated a range of potential electricity transmission network solutions that would accommodate these scenarios.

It considered a range of scenarios associated with the connection of large volumes (up to 34 GW) of onshore and offshore wind generation required to meet the 2020 renewables target, combined with 10 GW of other new generation, including nuclear power. Proposed reinforcements include up to 1,000 km (621 miles) of new cables, including high-voltage susbsea cable links between Scotland and England.

The study concludes that “provided the identified reinforcements are taken forward in a timely manner and the planning consent process facilitates network development, the reinforcements can be delivered to the required timescales.” To meet the 2020 deadline, work should begin now, it said.

Specific proposals for the reinforcement or expansion of the UK grid can only be undertaken by transmission licensees, and those proposals will be subject to regulatory and planning processes. But if the reinforcements proposed by the study are implemented, the grid would see its largest single expansion since the 1960s, the UK government said in a statement last week.

Meanwhile, Ofgem announced it intends to approve the funds needed to begin the preconstruction work on specific transmission projects that are due to start work soon. The group said it would also continue to develop proposals to make the regulatory regime capable of meeting the challenges presented by the 2020 renewable energy targets.

“Getting the right electricity infrastructure in place so more renewable generators can connect is critical if the UK is to meet challenging new renewable targets. Ofgem has been proactive in this area by approving major increases in investment in the electricity networks, including the £5 billion for network upgrades and renewal between 2007 and 2012,” said Ofgem Chief Executive Alistair Buchanan. 

“The industry report proposes the use of technology so far unused in this country. This demonstrates a willingness to consider innovative solutions which could lead to faster build times and avoid the need to secure planning permission for onshore lines. We will continue to work with the industry to develop appropriate incentives to encourage efficient and effective innovation.”

The question of who will pick up a bulk of the  £4.7 billion bill remains unanswered, however. According to The Guardian, National Grid, which runs the transmission system in England and Wales, would pick up a portion of the cost, billing utilities to recover its cost. Those utilities would likely pass on the extra costs to the ratepayer, the newspaper surmised.

Sources: ENSG, National Grid, DECC, The Guardian

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