SSEN TRANSMISSION PUBLISHES RIIO-T3 BUSINESS PLAN

SSE PLC

10 December 2024

 

SSEN Transmission sets out plans to invest £22bn+ in mission-critical grid infrastructure

·    Business Plan for RIIO-T3 published, setting out an ambitious yet deliverable blueprint for investment

·    Investment key to delivering UK and Scottish net zero and energy security targets, including the UK Government's Clean Power by 2030 ambition

·    Will drive economic growth, supporting up to 37,000 UK jobs, 17,500 in Scotland; adding up to £15bn of value to the UK economy, £7bn in Scotland

SSEN Transmission, the 75%-owned subsidiary of SSE plc, will today submit to the energy regulator, Ofgem, its plans to deliver at least £22bn in mission-critical grid infrastructure through its Business Plan for the RIIO-T3 price control, covering the period from 1 April 2026 to 31 March 2031.

'Delivering a Network for Net Zero: A Pathway to 2030'

The Business Plan is underpinned by three ambitious goals for the RIIO-T3 period:

·    Reliable Energy, with an ambition for zero interruptions in electricity supply to homes and businesses due to the north of Scotland transmission network.

·    Clean Power, with the north of Scotland transmission network having the capability to meet 20% of GB demand for clean power.

·    Our Legacy, to drive investments in the energy transition that delivers transformative lasting benefits for local communities, the economy and nature.

It sets out a clear and evidence-based need for an expected known total expenditure of around £22.3bn over the RIIO-T3 period.  This compromises:

·    a baseline total expenditure of around £6bn; and

·    around £16bn of committed strategic investments that have already received approval of need from Ofgem through its ASTI framework and LOTI Uncertainty Mechanisms.

SSEN Transmission has also set out the potential for an additional £9.4bn of future Uncertainty Mechanism expenditure, which could bring the total expenditure over the RIIO-T3 period to around £31.7bn.

The timing, progression and scale of this additional potential expenditure remains subject to a range of external factors.  These include regulatory and planning approvals, the outcome of Government policy decision and ongoing industry reform, securing supply chain, and, critically, an investible financial framework.

Enabling Government targets and driving economic growth

These investments are critical enablers of UK and Scottish Government climate change and energy security targets, delivering a pathway to net zero emissions and helping underpin the UK Government's Clean Power by 2030 ambition. 

It represents one of the largest ever private investment programmes in Scotland and will act as a major driver of jobs and economic growth across the country.

Economic analysis, which has been independently peer reviewed by leading consultancy, BiGGAR Economics, forecast that, if delivered in full, the potential £31.7bn total investment could support up to 37,000 jobs across the UK, 17,500 of which in Scotland, including 8,400 in the north of Scotland.  It would also add £15bn in value to the UK economy, £7bn of which in Scotland, including £3bn in the north of Scotland.

These investments will also provide significant local benefits, including community benefit funding, which, based on draft UK Government guidance, is expected to deliver well in excess of £100m in community benefit funding for projects being taken forward across the RIIO-T3 period. 

It will also support the development of at least 1,000 new homes across the north of Scotland, creating a legacy in the communities that will host construction workers by delivering housing that will support local need once projects are completed.

An investible financial framework

Delivery of this plan, the associated Government targets it will enable and the significant economic benefits it will unlock will require unprecedented and accelerated levels of strategic investment in the north of Scotland's electricity network infrastructure.  It is crucial that Ofgem's regulatory framework reflects this urgency and the wider economic context against which this investment must be secured.

The successful delivery of this plan therefore requires a financial framework commensurate with the scale of the task and capable of attracting the unprecedented levels of investment needed to deliver the clean energy transition and protect future energy consumers.

Rob McDonald, Managing Director of SSEN Transmission, said:

"Our RIIO-T3 Business Plan sets out an ambitious, deliverable blueprint, to unlock the unprecedented levels of investment required to deliver UK and Scottish net zero and energy security targets, including the Clean Power by 2030 mission. 

"In what is one of the largest investment programmes of all time in Scotland, this plan will also support tens thousands of jobs across the country, turbo-charging the economy and delivering a transformational and lasting legacy for communities, the economy and nature.

"We now look forward to working constructively with Ofgem, Government and wider stakeholders to ensure the future regulatory framework secures the investment required to support the nation's ambitious goals and delivers the vast economic opportunities the clean transition presents."

Alistair Phillips Davies, Chief Executive of SSE plc, said:

"The RIIO-3 price control comes at a critical juncture in the effort to deliver a cleaner, more secure and affordable electricity system for current and future generations.

"With a new national mission to deliver clean power by 2030 in order to boost energy security and protect future consumers, unlocking the right level of investment during the next price control will be key.

"We're setting out today the extent of our ambition and commitment; it is now crucial that Ofgem backs that ambition with an investable and financeable framework, setting an appropriate cost of equity that recognises the unprecedented levels of investment required to decarbonise the economy and deliver a clean power system."

Next steps

Ofgem is expected to launch a Call for Evidence from 18 December 2024 to 10 February 2025 followed by the publication of its Draft Determinations in June 2025 and Final Determinations in December 2025.

For more detail, please visit SSEN Transmission's dedicated Business Plan website:

www.ssen-transmission.co.uk/RIIO-T3

Notes

All prices in 2023/24 base.

About SSEN Transmission

·      SSEN Transmission is responsible for the electricity transmission network in the north of Scotland, investing in and maintaining the high voltage 132kV, 220kV, 275kV, 400kV and HVDC electricity transmission network.

·      SSEN Transmission's strategic objective is to enable the transition to a low carbon economy.  It does this by building the electricity transmission network infrastructure required to connect and transport renewable electricity from the north of Scotland to areas of demand, as it delivers a network for net zero emissions.

·      SSEN Transmission is owned 75% by SSE plc and 25% by Ontario Teachers' Pension Plan Board (Ontario Teachers').

·      Learn more about SSEN Transmission by visiting www.ssen-transmission.co.uk, twitter at @ssetransmission, LinkedIn or Instagram.  

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