Ofgem's new funding model fast-tracks grid upgrade with Eastern Green Link 2

Ofgem’s Accelerated Strategic Transmission Investment (ASTI) framework is expediting 26 major connection projects to enhance grid capacity, potentially saving an estimated £1.5 billion, according to a recent announcement by the UK regulator.

A £3.4 billion funding package has been allocated for the construction of a new proposed subsea and underground infrastructure.

Eastern Green Link 2 (EGL2) is the first project to complete the expedited funding process under Ofgem’s new ASTI framework.

The ASTI framework shortens the funding timeline by up to two years, enabling offshore wind energy to reach British consumers more quickly.

All projects funded through Ofgem’s ASTI program are crucial for modernizing the energy system and integrating additional renewable energy into the grid.

This advancement supports the Government’s target of achieving clean power by 2030 and decreasing dependence on unpredictable international gas markets.

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The EGL2 will establish a 2GW high-voltage electricity 'superhighway' connecting Peterhead in Aberdeenshire with Drax in North Yorkshire, optimizing the use of British offshore wind energy.

The majority of the cable, approximately 436km, will be laid beneath the North Sea, with the remaining 70km running underground onshore. Two converter stations, located at each end of the cable, will facilitate the integration of this electricity into the grid and its distribution to consumers.

In its effort to minimize customers' costs while upgrading the energy system, Ofgem reviewed the developers' proposal and identified over £79 million in cost savings. These have been removed from the project budget without compromising on delivery or quality.

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ASTI projects will enhance millions of consumers' access to domestically produced wind energy and increase grid capacity.

This will result in an estimated £1.5 billion in savings by reducing the need to pay generators to shut down production during high wind periods due to insufficient grid capacity.