In conjunction with the proposed Orkney “ mainland Scotland transmission link (which has been conditionally approved by Ofgem), SSEN has proposed an “Alternative Approach” for grid connections to address the specific challenges with connecting on Orkney. The Alternative Approach proposal has 2 parts:
1. Ready to Connect Process
This proposes to allocate grid capacity to projects based on a “readiness” to connect. This takes into account progression against a typical project programme’s key milestone, such as obtaining planning consent. Projects can move up or down in the connection queue, which would be reviewed every 6 months, based on progress against pre-determined milestones.
2. Temporarily Adjusting Liabilities
This proposal would temporarily remove the cost of the 53 km, 275kV subsea cable from the liabilities faced by the contracted projects. This would allow them to progress without having to put up high securities. After a 9-month period, the liabilities would be re-introduced.
To be implemented, the Alternative Approach requires various derogations from SHEPD’s Distribution License and the Connection Use of System Code (CUSC), which were consulted on by Ofgem. Ofgem published their decision in September 2019 and have decided to approve the Ready to Connect Process, but to reject the Temporary Adjustment of Liabilities.
Ofgem consider that the Ready to Connect process will provide a more efficient way of managing connections, and may provide useful learning for the Energy Networks Association’s (ENA) Open Networks Project. As in their minded to position, Ofgem’s view was that the Temporary Adjustment of Liabilities would provide an unfair advantage to developers on Orkney over other developers in GB, would place risk on consumers, and that the high liabilities reflect the high cost of carrying out the work.
The high cost of providing securities remains a key barrier for connections on Orkney. SSE will now need to go through the process of formally requesting the derogations from the Gas and Electricity Markets Authority, and will then review delivery plans from developers who retain an interest in securing capacity, although no implementation timescales have yet been published.
