SSEN sets out post-RIIO-T2 vision for Scotland’s transmission network

Low-carbon economy objective remains with three potential development models proposed.

Scottish and Southern Electricity Networks (SSEN) has revealed its post RIIO-2 strategy in its new Emerging Thinking document. This includes estimated annual investment in new and upgraded infrastructure of between £250m and £700m by operating company Scottish Hydro Electric Transmission (SHE).

The paper is the culmination of 18 months’ of public and stakeholder consultation and lays out the organisations’ thoughts and projections for the first half of the 2020s, starting with its strategic objective.  Set in 2010, the objective was “to enable the transition to the low carbon economy.” While remaining unchanged as the DNO moves into the next decade, SSEN has sought to clarify how this will be achieved with four key themes:

  1. Stakeholder-led strategy
  2. Safe and secure network operation
  3. Sector leading efficiency
  4. Leadership in sustainability

Investment models

Driven by the next phase of Ofgem regulation through RIIO-T2, SHE has also put forward a plan for “responsible investment in critical national infrastructure…focused on its responsibility to maintain an affordable network for energy consumers across GB and ensure its transmission costs, which currently account for less than 1% of a typical annual household electricity bill, remain efficient.”

The detailed paper included three potential, and largely self-explanatory, transmission investment models: Cost Limitation, Local Optimisation and Proactive Decarbonisation.  The scale of investment will be determined by regular consultation throughout the development phase of each new project. While the overall annual investment range could average anywhere from £250m to more than £650m, SHE believes the actual level will be somewhere between the two.

Making assumptions

SSEN also used some educated assumptions to estimate the cost of running its transmission network on individual households.  It estimated that: “In 2018/19 our costs for the north of Scotland transmission network are around £4.48 for the average GB household. Looking forward, based on our emerging thinking for the RIIO-T2 period, we estimate that this could change to between £4.28 (-5%) and £5.36 (+20%) by 2025/26.”

SHE’s Managing Director, Transmission, Rob McDonald, commented: “As we move to a new price control, it is vital that we continue to deliver a transmission system that supports further progress towards decarbonisation goals, drives local economic development and maintains a reliable and safe network, all at an affordable cost for consumers.” 

He added: “Today’s publication is an important step in the process of developing our business plan, setting out our initial views of key priorities and themes that have been shaped by the extensive customer and stakeholder engagement and research we have conducted to date.”