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(Alliance News) - National Grid PLC and SSE PLC on Thursday said it welcomed the decision from Ofgem that confirmed that increased electricity transmission investment is necessary.
The UK energy watchdog on Thursday published its Accelerated Strategic Transmission Investment framework.
It said this will streamline regulatory approval processes for new projects, alongside ensuring consumer protection and allow for building new infrastructure quicker than previously.
The decision means National Grid is now responsible for the delivery of 17 major onshore electricity transmission projects in the UK.
The London-based electricity and gas utility said it welcomed the clarity and commitment that Ofgem's decision gave National Grid and the wider industry, marking the next step towards a more affordable, resilient and clean energy system.
It said delivering the 17 onshore electricity projects is not only fundamental to decarbonising the UK electricity system, it will also improve supply security and long-term affordability for customers.
National Grid agreed with Ofgem that urgent reform is still required across a number of areas, including streamlining the planning system to allow for delivery in a more timely manner.
It said communities need to be made aware of the long-term economic benefit to hosting the necessary infrastructure in their area, as the UK looks to achieve net-zero emissions in the future.
National Grid said it will continue to work with the UK government and Ofgem to progress these projects, while looking ahead to agreeing a regulatory and financial framework for future infrastructure projects.
Meanwhile, SSE said Ofgem approved all projects put forward by its SSEN Transmission division to meet the UK government's offshore wind energy targets by 2030.
The Perth, Scotland-based energy company said all projects will now be taken forward as part of Ofgem's ASTI framework.
These include two 2 gigawatt high-voltage direct current links from Peterhead, Scotland to England, which is a joint-venture with National Grid, alongside projects linking Spittal to Peterhead, and Arnish on the Western Isles to near Inverness.
SSE also said Ofgem confirmed SSE will be exempt from proposals to introduce competitive ownership of onshore electricity networks, as being currently considered by the UK government's draft energy bill.
"Accelerating the development and delivery of the strategic electricity transmission infrastructure required to enable the deployment of home-grown and affordable, low carbon power, is arguably the most important enabler to securing the UK's future energy security and net zero ambitions," said Rob McDonald, managing director of SSEN Transmission.
"As we continue to assess the detail of today's publication and await Ofgem's proposed regulatory licence changes, we remain committed to work constructively with Ofgem and other stakeholders to establish a regulatory framework that appropriately balances risk and reward, and ultimately accelerates the delivery of electricity transmission infrastructure required to meet our future energy ambitions."
On Tuesday, Ofgem published its 2022 annual iteration process results, which determines price controls for gas transmission, electricity transmission and electricity system operator companies.
Relative to the previous year, it said it would increase allowed revenue by approximately GBP1.15 billion in gas transmission, GBP544 million in electricity transmission, and GBP119 million for electricity system operators.
This will take effect from the next regulatory year running from April 2023 to March 2024.
Ofgem said this was driven by significant forecast gas price rises over the past year, inflationary pressures, higher cost of capital allowance and higher expenditure forecasts.
Shares in National Grid were down 0.8% to 1,019.52 pence each in London on Thursday morning, while shares in SSE were down 0.4% to 1,719.50p.
By Greg Rosenvinge, Alliance News reporter
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