Ofgem fast-tracks UK electricity ‘superhighways’ to cut wind curtailment costs

Britain’s energy regulator has approved early investment in three major electricity “superhighways” in a bid to reduce the growing cost of paying windfarms to switch off during periods of high generation.

The decision by Ofgem is designed to ease severe bottlenecks in the electricity grid, which currently lacks the capacity to transport large volumes of renewable power from Scotland and the North Sea to areas of highest demand in England.

Under the plans, new high-voltage cable projects linking windfarms to the south of the country could be operational in the early 2030s, several years earlier than previously expected. Ofgem said accelerating delivery would help rein in the spiralling costs of so-called constraint payments, which are passed on to consumers through their energy bills.

Without major grid upgrades, payments to generators to curtail output are forecast to exceed £12 billion a year by the end of the decade. Ofgem estimates that bringing forward the three projects could leave consumers between £3 billion and £6 billion better off, largely by cutting the almost £2 billion currently paid each year to windfarms to reduce production when the grid is overloaded.

The regulator has given the green light for early investment by National Grid, SSE and Scottish Power in two Eastern Green Link subsea cables, which will transport offshore wind power southwards by around 2034. It has also approved early spending on the 75-mile (120km) Grimsby to Walpole electricity link, intended to move power from the east coast to consumers from 2033.

While Ofgem argues the move will save money in the long term, it acknowledged that fast-tracking the projects is likely to bring forward some costs for consumers. The announcement comes just days after the regulator approved £28 billion of investment across Britain’s gas and electricity networks. Ofgem has not yet set out the precise impact on household energy bills or when any increase would take effect.

The decision is also expected to intensify opposition from some local communities, particularly in rural areas, where residents have raised concerns about construction disruption and the long-term industrialisation of the countryside.

Beatrice Filkin, Ofgem’s director of major projects, said the regulator was not giving energy companies “blank cheques” and stressed that planning consent would still be required. However, she said early investment would allow projects to move more quickly and help protect consumers from unnecessary costs.

“We are helping shield consumers from rising constraint payments while ensuring the UK is better placed to compete for global supply chains as economies shift away from fossil fuels,” Filkin said.

The move comes amid a broader push to upgrade electricity networks across Europe. The European Commission is expected to unveil plans this week for a €1.2 trillion overhaul of the EU’s power grids, underlining the scale of investment required as countries accelerate the transition to renewable energy.