Planning

– Scottish Parliament written question – answered on 14th March 2011.

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Photo of Wendy Alexander Wendy Alexander Labour

Question S3W-39684

To ask the Scottish Executive what level of committed grid investment there is and planned grid investment it envisages over the next 10 years, broken down by (a) year, (b) project and (c) investor.

Photo of Jim Mather Jim Mather Scottish National Party

The Scottish Government works to identify and deliver the reinforcement and further development of Scotland’s grid network that will connect and transport Scotland’s energy potential, deliver a low carbon generating mix and ensure security of future energy supply.

Our Second National Planning Framework highlights a range of energy generation, infrastructure and grid developments of national importance to Scotland. Proactive use of our powers on spatial onshore and offshore planning and consenting has resulted in a step change in planning, consenting and developing Scotland’s energy future.

http://www.scotland.gov.uk/Publications/2009/07/02105627/0.

We work closely with UK, EU Governments, the GB system regulator Ofgem and transmission system operators in a number of strategic groupings envisaging future gird network at UK and EU level; including the Electricity Networks Strategy Group on future onshore and offshore GB reinforcement, and EU level groupings on future interconnected grid development in the Irish and North Seas.

The Scottish Government does not hold detailed information on levels of committed and planned grid investment. This is a regulated activity by Ofgem and the three transmission system operators (National Grid Electricity Transmission Limited, Scottish Hydro Electric Transmission Limited and Scottish Power Transmission Limited). Decisions on specific grid projects and investment plans are part of this regulated process.

The transmission system operators are responsible for developing their networks in line with their licence obligations. The revenue network companies can earn in doing so is determined by the regulatory "price control" process. This process provides the companies with future revenue levels and incentives to take forward efficient investment and running their systems.

The transmission system operators develop projects to upgrade and reinforce transmission infrastructure within their area based on their assessment on what is required to run their network in an efficient manner. They submit these proposals to Ofgem for assessment and funding approval. Ofgem considers cost, and other factors such as need, for the electricity networks investment proposals put forward by network companies.

The current transmission price control process (a Retail Price Index based process) runs from 2007-12. In that period Ofgem has agreed the transmission system operators can invest £3.8 billion in grid and network development. Detail is at:

http://www.ofgem.gov.uk/Networks/Trans/Archive/TPCR4/Pages/TPCR4.aspx.

In addition, on 25 January 2011 Ofgem also announced a £95 million investment package over the next two years to increase the capacity of Scotland’s power networks. Detail can be found at:

http://www.ofgem.gov.uk/Pages/MoreInformation.aspx?file=ScotlandUpgrade25012011.pdf&refer=Media/PressRel.

This price control period has been extended to 2013 as Ofgem transitions to an output performance-based approach to regulate energy networks. This RIIO model (Revenue = Incentives + Innovation + Outputs), covering eight year periods, will set regulatory price controls beyond 2013.

The two Scottish transmission licensees are required by their licence obligations to assist National Grid, as System Operators of the National Electricity Transmission System, in preparing detail on the timing and scope of planned grid investment (as opposed to funding). Specific detail is available in the resulting "Seven Year Statement" at http://www.nationalgrid.com/uk/Electricity/SYS/current/.

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