The UK government has announced a £1.35 billion loan to energy firm ScottishPower to upgrade the power grid between Scotland and England, which is expected to bring down energy bills and support the transition to clean energy. The loan, provided by the National Wealth Fund and several banks, will be used to build offshore cables to carry wind power from Scotland to England, via the North Sea. This project aims to address the issue of “curtailment,” where excess energy generated by Scottish wind turbines is wasted due to a lack of grid capacity, resulting in an estimated £1.23 billion in lost energy last year.
The Eastern Green Link (EGL) project will consist of two major offshore cabling projects: one carrying electricity from Torness in south-east Scotland to Hawthorn Pit substation in County Durham, and another from Fife to Lincolnshire. The financing package will also support grid upgrades, including new substations and overhead lines in Scotland. According to Chancellor Rachel Reeves, this investment will “bring down bills, put more money in working people’s pockets, and enable businesses to expand.”
The project is part of the UK’s efforts to meet its clean power goals, with an estimated £60 billion of investment needed over the next five years. Energy Secretary Ed Miliband stated that the funding will “help deliver clean power by 2030 by speeding up grid upgrades – bringing cheaper, homegrown renewable power into homes and businesses, while supporting skilled jobs across the country.” The National Wealth Fund, a publicly-owned investment vehicle, is providing £600 million of the funding, with the remaining amount coming from a series of banks.
The investment is expected to have a significant impact on the transition to a renewables-based electricity system, addressing grid constraints that make electricity more expensive. Keith Anderson, chief of ScottishPower, emphasized the importance of working together with financing organizations to drive economic growth and progress in bringing more renewables onto the system. With this investment, the UK is taking a significant step towards achieving its clean energy goals and reducing reliance on fossil fuels.