National Grid and Scottish Power fined £158m over delays to subsea cable project
National Grid and Scottish Power Transmission (SPT) have been ordered to pay £158m by the energy regulator for delays to a major power cable linking Scotland’s energy networks with the rest of Great Britain.
The two-year delay made it difficult at times for renewable energy generators in Scotland to export clean electricity to England and Wales, Ofgem said.
Both National Grid and SPT have been jointly blamed for the late delivery of the Western Link Project and the £158m fine will be used to lower household bills.
£15m will be paid into Ofgem’s Redress Fund which is operated on its behalf by the Energy Saving Trust and allows companies to pay a sum of money to appropriate charities, trusts, organisations or consumers as a result of breaches of licence conditions.
The remainder of fine will be returned via reduced system charges that are ultimately paid for by consumers as part of their overall electricity bills.
Western Link is a transmission project worth around £1.2bn, providing a major subsea electricity link between Scotland and Wales. The link is 422km long, of which 385km is under water.
It was designed to transport electricity, often from green sources like offshore wind, between Scotland and Wales and provides an additional 2,250MW of capacity.
The two-year delay restricted renewable generators in Scotland exporting electricity to England and Wales, because at times there was not enough capacity to do so.
Because renewable generators in Scotland were unable to transport the energy they were generating, National Grid ESO would have sometimes had to reduce the output from windfarm generators to protect the electricity system. This ultimately led to higher costs for consumers.
Ofgem’s investigation found that the root causes of the delay were problems with manufacturing processes, installing the cables and commissioning tests. It acknowledged that the two companies did not cause or exacerbate the delay.
Cathryn Scott, Ofgem’s enforcement director, said: “To deliver the UK’s climate change ambitions, more of our electricity will come from renewable generation. This is already happening, with offshore wind and other projects in development. Innovative projects such as the Western Link are vital in moving clean energy from where it’s produced to where it’s needed.
“However, they must be delivered on time and to the standards agreed. Where they are not, as the energy regulator, we will hold the licensees accountable.”
In September, a fire disabled an interconnector linking the French and British power networks causing wholesale electricity prices to soar for energy firms.
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