Decision on the proposed Kintyre-Hunterston reinforcement, under the electricity transmission price control, RIIO-T1, Strategic Wider Works (SWW) arrangements
Decision
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This letter sets out the Authority’s decision on the proposed reinforcement of the transmission system around the Kintyre peninsula in the South West of Scotland (the Kintyre-Hunterston project) which was submitted by Scottish Hydro Electric Transmission plc (SHE Transmission). This is our decision (subject the relevant licence modification proposals) on the transmission project proposal following our consultation on the Project Assessment, which we published on 24 July 2013. The reinforcement project is designed to deliver a SWW output of 270MW of additional transmission capacity, it is expected to cost £197.4 million (in 2013 prices), and is planned to be completed in 2016.
Taking into account the evidence submitted by SHE Transmission, our analysis of both the Needs Case and the Project Assessment, our consultants’ views and points raised in response to our July consultation, the Authority has decided:
- To make a decision on the appropriate increase in Allowed Expenditure and SWW output at this time, subject to consideration of a request by SHE Transmission for a potential modification to the Transmission Area specified in its licence. The decision on the SWW Output and Allowed Expenditure is also subject to a licence modification proposal (to insert these into SHE Transmission’s SWW licence condition)
- To require SHE Transmission to deliver a SWW Output from the project of 270MW additional transmission capacity across the B3 transmission boundary in the South West of Scotland in the final quarter of 2015/16.
- To increase SHE Transmission’s Allowed Expenditure in the price control, RIIO-T1, by £197.4 million (in 2013 prices). This is £15 million less than the amount requested by SHE Transmission in its initial submission. A reduction of £6 million was due to cost savings in SHE Transmission’s final contract negotiations with its suppliers. An additional £9 million reduction is due to our alternative treatment of risk and uncertainty to that proposed by SHE Transmission.