A GHD study has progressed new energy development potential by revealing viable investment options for grid reinforcement business case.
Facilitating large renewable generation connections from the remote Scottish Islands to the mainland of Great Britain presents regulatory challenges amid concerns about cost viability. Power generation developers are reluctant to commit to renewable development without network capacity to export their power. However, transmission companies cannot make a case to the regulator to commit expenditure to connect the islands without evidence of underlying committed generation development. The result is a Catch-22, whereby the case for either transmission or generation development is entirely predicated on the other, leading to a development hiatus.
The purpose of GHD's study was to break this hiatus. The solution developed had to flex in a highly dynamic environment and consider changes in government policy, including the differing and sometimes conflicting positions of UK Government, Scottish Government and local councils. Changing renewable subsidy arrangements added complexity, together with the impact of local council planning decisions and evolving generation technologies (in particular tidal) leading to a constantly shifting generation backdrop.
The GHD team developed a detailed, multifaceted cost-benefit analysis methodology and associated tool-set to enable a robust techno-economic assessment of the investment options in an environment defined by prevailing ambiguity. The project's aim was to identify the most economically advantageous solution in light of underlying uncertainty and show that the preferred solution provides value for money to the electricity consumer in Great Britain and benefits the island communities. The solution balanced the benefit of unlocking the vast renewable resource potential on the islands with the potential cost of becoming a stranded white elephant.
By suppling bespoke, micro (and macro) views of the investment outcomes under varying, plausible scenarios SHE-Transmission (Scottish & Southern Electricity Networks) submitted robust Needs Cases to the regulator for consideration that show the investments to be both economic and socially beneficial.