A project that puts the North East at the heart of the Ƶ’s renewable energy infrastructure has been backed by £1.35m from the Government and major banks.
The Ƶ’s National Wealth Fund has joined Bank of America, BNP Paribas, Lloyds and NatWest in lending energy firm ScottishPower the loan to upgrade the power grid between Scotland and the Hawthorn Pit substation in County Durham.
The financing package for the Eastern Green Link (EGL) project will help pay for work on several major offshore cabling projects carrying electricity from wind farms in Scotland into England via the North Sea.
The project - which will be followed by a similar link from Scotland to Lincolnshire - will help transmit renewable energy from Scottish wind farms to areas of higher demand in England.
Currently, large amounts of power generated by Scottish wind turbines are wasted every year because the grid does not have the capacity to carry it south of the border. When bottlenecks happen, wind farms are paid to stop operating and gas power stations are paid extra to supply the energy needed.
That power is seen as crucial to many of the sectors where the Government is hoping to see economic growth, including data centres and housebuilding.
Chancellor Rachel Reeves said the project would help “bring down bills, put more money in working people’s pockets and enable businesses to expand” while Energy Secretary Ed Miliband said it would “help to deliver clean power by 2030 by speeding up grid upgrades”.
About £600m of the funding is coming from the National Wealth Fund, a publicly-owned investment vehicle set up by the Government last year.
John Flint, CEO at National Wealth Fund, said: “Upgrading the power grid is one of the most significant barriers to decarbonising our economy, and the scale of investment needed to address this challenge is substantial.
“Our financing will support some of the most vital grid upgrades that will have a major impact on the transition to a renewables-based electricity system and help address the grid constraints that make electricity more expensive for businesses and consumers.
Keith Anderson, CEO of ScottishPower, said: “Today’s announcement is a welcome step forward in the delivery of the Government’s Clean Power 2030 pathway.
“Working together to drive forward these critical investments is an important catalyst for economic growth, as we make progress in bringing more renewables onto the system to meet the increasing demand for electrification.”
Speaking on the BBC Today programme, Mr Anderson said the finance package would allow ScottishPower to begin signing contracts “the length and breadth of the Ƶ” to upgrade the country’s power network.
