Green Light for Electricity Network Upgrade

Green Light for Electricity Network Upgrade

Aug 12 - Herald, The; Glasgow (UK)

ENERGY regulator Ofgem will today give the green light for vital upgrades to Scotland's creaking electricity network that will allow the nation to exploit the full potential of green power resources such as windfarms.

Upgrading the electricity grid is essential if the renewable energy sector is to reach the government's target of generating 10% of the UK's power needs by 2010. However, plans to improve the network are expected to spark a storm of protest from some green campaigners who are anxious to ensure the work avoids damaging the Scottish environment.

Ofgem is preparing to introduce a new regulatory mechanism which allows the electricity transmission companies to fund the network upgrades that will help release Scotland's rich renewable energy resources. Until a consultation exercise is completed in November, Ofgem has allowed an initial (pounds) 360m investment in the grid.

Lewis Macdonald, Scottish Executive deputy enterprise minister, said: "These upgrades will play a central role in the expansion of the renewable energy sector, helping us to meet our renewables targets, create jobs and help protect our environment by reducing emissions and tackling climate change."

The three UK transmission companies - National Grid, ScottishPower and Scottish & Southern Energy - need to spend more money upgrading the network for renewable energy than Ofgem allows under its current price controls, which are not up for review until 2007.

However, today's move effectively allows the companies to invest in the grid before the review which will avoid delaying the development of renewable generation. Ofgem has given immediate approval for a (pounds) 350m construction project to reinforce the grid between Beauly and Denny and at Sloy.

Ofgem's remit also involves ensuring consumers' interests are safeguarded so that they pay no more than is absolutely necessary for electricity and gas, particularly at a time of rising energy prices.

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