(Bloomberg) -- UK energy regulator Ofgem gave the green light to a £3.4 billion ($4.4 billion) funding package to build a proposed electricity “superhighway” under the North Sea.
The project entails laying a 500-kilometer (311-mile) cable between Scotland and England to power as many as 2 million homes, the watchdog said Tuesday. About two years have been shaved off the approval time for the venture, the first of 26 in Ofgem’s new fast-track funding process for offshore wind, it said.
Grid expansion is key to the UK’s energy transition, allowing wind power from Scotland to be transported to demand centers in England. National Grid Plc’s Electricity System Operator estimates that £112 billion needs to be invested in the network to ensure the country is on track for net zero.
Construction of the so-called Eastern Green Link 2 venture is expected to begin later this year, with the project operational in 2029. It’s being developed by Scottish & Southern Electricity Networks Transmission and National Grid Electricity Transmission — both divisions of UK listed companies.
National Grid in May announced a £6.8 billion capital raise to help fund its massive investment program — including developments such as the undersea cable. The spending plan includes £23 billion for electricity transmission, a 250% increase on the previous five-year period.
A similar cable to Eastern Green Link 2, the shorter Eastern Green Link 1, is also in the development phase and due to be operational in 2029.
(Updates with funding details in fourth paragraph.)
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