SSE submits final RIIO-T2 Business Plan to Ofgem
Scottish and Southern Electricity Networks Transmission (SSEN Transmission), the wholly owned subsidiary of SSE plc, has today submitted to the GB energy regulator, Ofgem, its final Business Plan for the RIIO-T2 transmission price control, which covers the period between April 2021 and March 2026.
'A Network for Net Zero', SSEN Transmission's Business Plan sets out its 'Certain View' of the next price control period, which makes a powerful investment case for a minimum total expenditure (Totex) of £2.4bn over the RIIO-T2 period.
This investment is essential to maintain and grow the north of Scotland transmission network to meet the certain needs of current and future electricity generators and customers, delivering a clear pathway to net zero. This is an increase from the £2.2bn totex forecast in SSEN Transmission's draft Business Plan summer consultation.
This could see the regulatory asset value (RAV) of SSEN Transmission increase from its current level of £3.4bn to over £5bn by the end of the RIIO-T2 price control period in 2026.
The submission of SSEN Transmission's RIIO-T2 Business Plan follows substantial consultation with national and local stakeholders as well as SSEN Transmission's independent expert RIIO-T2 User Group. It aims to support both the UK and Scottish Governments' net zero targets and meet the needs and expectations expressed by stakeholders through five clear, ambitious goals:
· Transport the renewable electricity that powers 10 million homes
· Aim for 100% transmission network reliability for homes and businesses
· Every connection delivered on time
· One third reduction in greenhouse gas emissions
· £100 million in efficiency savings from innovation
In addition to the 'Certain View', it is anticipated that further investment will be required to deliver the transition to net zero, delivering additional RAV growth which in turn supports future earnings. SSEN Transmission's 'Likely Outturn Assessment', which takes this into account, suggests a potential additional Totex of around £1bn on top of the £2.4bn Certain View.
To deliver its plans, SSEN Transmission estimates its average cost to the GB consumer over the RIIO-T2 period will be around £7 a year, which includes forecast movements in inflation.
Rob McDonald, Managing Director for SSEN Transmission, said:
"We believe our Business Plan represents a balanced package that makes a powerful case for the vital investment needed to deliver a pathway net zero. It will also lead to improved network reliability, at an affordable cost to consumers, whilst also providing a fair return to investors.
"We would like to thank all our stakeholders who helped shape our plan and we now look forward to Ofgem's consultation on our final Business Plan and the subsequent open hearings, which are expected to take place in the first half of 2020."
As part of Ofgem's consideration of the final plan, the regulator will consult with stakeholders during 2020 before determining what level of investment should be taken forward from 2021 through to 2026.
