Building networks fit for net zero17 Jun 2022
With electricity demand expected to more than double by 2050, regulated electricity networks are at the heart of the transition to net zero. SSEN Transmission and SSEN Distribution continue to be critical to SSE’s strategy and balanced business mix. The Net Zero Acceleration Programme will enable SSE to deliver over 20% of all planned UK electricity networks investment, increasing Regulated Asset Value (RAV) to £9bn by 2026 (net of proposed 25% minority stake sales).
SSEN Transmission has made substantial progress this year on major projects within its capital delivery programme, including the landmark Shetland HVDC Link. With options for substantial growth over and above capital expenditure plans approved under the RIIO-T2 price control, projects such as the Eastern HVDC, North Argyll and Skye reinforcement are expected to progress through the Needs Case assessment process.
In January 2022, National Grid Electricity System Operator (NGESO) published its annual Networks Options Assessment (NOA), which indicated the need for more than £5bn of investment in electricity transmission infrastructure in the North of Scotland to maintain a pathway for net zero. These investments and the clear need to accelerate reinforcements to unlock ScotWind start to provide a clear line of sight on and tangible progress towards 2031 RAV growth forecasts for SSEN.
SSEN Distribution could see a trebling of demand in its network areas by 2050, with seismic shifts in consumption already in progress as electric vehicles and heat pumps rapidly scale up this decade. The likely load expenditure required to keep pace with these changes informed the final business plan for the 2023-28 RIIO-ED2 price control period, submitted to Ofgem in December 2021.
The almost £4bn plan sets out how improvements will be delivered for customers and network investment accelerated to power communities to net zero. The plan also proposes £900m of additional potential investment under regulatory Uncertainty Mechanisms to help protect customers and provide the necessary flexibility as opportunities and policy evolves.