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NETWORK / 13 / SEPTEMBER 2019 around £7 a year. Challenges SSEN Transmission is part of Scottish and Southern Electricity Networks, operating as Scottish Hydro Electric Transmission plc under licence. The rm is responsible for maintaining and investing in the electric- ity transmission network in the north of Scotland. The company own and maintain the 132kV, 275kV and 400kV electricity trans- mission network in its licence area. The network comprises of underground cables, overhead wooden poles, steel towers and electricity substations, and it extends over a quarter of the UK land mass across some of its most challenging terrain. SSEN Transmission's operating area is home to vast renewable energy resources and this is being exploited by wind, hydro and marine generation. Working closely with National Grid, the GB transmission System Operator, the company enable these electricity generators to connect to the transmission system by providing their con- nections and allowing the electricity gener- ated by them to be transported to areas of demand across the country. "We've seen phenomenal growth in renewable energy in the north of Scotland," comments McDonald. "We've gone from roughly 3GW of renewable energy at the start of T1 to about 6GW today. If we deliver the certain view, we'll see it double again." Talking about the area covered by SSEN Transmission, McDonald added: "We have a very di– cult terrain. We cover about a quarter of the UK's landmass with three per cent of the population centred in four main population centres in our patch. That leads to some pretty unique challenges. This year we've experienced some severe weather and wild res in remote parts of our territories as well as winter conditions. Some of the High- lands can get very extreme. The network has seen huge growth, but there are large parts that need refurbishment that have not been a— ected by that growth." Despite the challenges around meeting net zero, McDonald is con dent that SSEN Transmission is in a strong position. "It's crystal clear that renewable genera- tion will be a massive part of the solution. We talked about the doubling and then the doubling again of renewables on our own network. That would leave us with 20 per cent of renewable generation in the country. We must build a network to connect it. I'm optimistic that net zero will drive the right policy framework." The company has been engaging with stakeholders and is encouraging all those with an interest in the future of the north of Scotland transmission system and the transition to net zero to respond to its con- sultation. "We've had extensive engagement with a wide range of parties including consumer groups. We've got our own user group that's very representative of the communities we serve. The most important message we got was that they wanted a business plan that demonstrated ambition. We were encour- aged to be bold and I've heard the word ambition used time and time again in all of our engagement." For SSEN Transmission, turning ambi- tion into action will now be key. Holyrood to spell out a roadmap of exactly how we're going to get there. I think we're going to need a clear policy direction. It's a very ambitious target. I think we can achieve anything if we put our mind to it, but it requires pace and clarity of direction and plans." The company anticipates that additional investment will be required to deliver the transition to net zero, but this investment will only be released once there is certainty it is needed – protecting billpayers. Ofgem recently con rmed plans to almost slash in half the returns that energy networks can make. The energy regulator rati ed its price control methodology for the new RIIO2 framework, which covers the electricity and gas transmission networks together with gas distribution. If applying the agreed methodology to- day, Ofgem would set the allowed baseline return on equity at 4.3% (CPIH) in a cost of equity range of 4% to 5.6% - almost 50% lower than under the previous price control (RIIO1) and the lowest ever capital rate for energy network companies. McDonald admits that as things stand this would be a challenging settlement for SSEN Transmission. "Our view is that Ofgem's proposals don't strike the right balance between keep- ing bills as low as possible versus the risk and need to incentivise investment in the system," he remarked. "We don't think the current proposals have got that balance right. We've been very clear in encouraging Ofgem to focus on two areas. "Firstly, we think the allowed returns are out of step with the market evidence and don't strike the right balance. Secondly, we think that incentive regulation has pro- duced substantial bene ts to customers. We worry that is being watered down in the pro- posals and have asked Ofgem to rethink on that. I think there's quite a way to go during the RIIO process. We're at least a year or 18 months away from seeing a nal decision so I think there's plenty of discussion to be had before we reach a conclusion." So how much additional investment will be needed to deliver the transition to net zero? "We've got about £1bn le¥ of additional onshore investment that we could see po- tentially being brought forward as we move towards net zero. We've not included it in the certain view as it hasn't been triggered yet," notes McDonald. "It could easily be triggered in T2 or beyond." To deliver its plans, SSEN Transmis- sion estimates its average cost to the GB consumer over the RIIO-T2 period will be An Erickson S-64 Air Crane helicopter lifts composite poles into place for the Dorenell wind farm connection in Moray. "We think that we've submitted to Ofgem a very ambitious plan to develop, own, operate and maintain a network for net zero." ROB MCDONALD ROB MCDONALD PAYING FOR THE NETWORKS