London, March 6, 2026, 09:46 GMT
Britain’s energy watchdog Ofgem on March 5 said it’s considering giving SSE the green light to go ahead with its entire early-construction funding request for eight Scottish transmission projects—meaning SSE could move forward on land purchases, prep work, and placing equipment orders well before final project reviews are finished. In the consultation, Ofgem indicates it’s inclined to let Scottish Hydro Electric Transmission, SSE’s transmission arm, exceed the typical 20% early-spend cap for five of the projects. That would require changing its licence.
SSE has tilted the bulk of its five-year investment plan—roughly 80%—toward regulated networks, and that shift is drawing attention now. According to Ofgem, hitting those project milestones by 2030 could slash constraint payments, which are the charges that pop up when the grid can’t deliver electricity where it’s needed, and keep high-priority upgrades on track.
Early Construction Funding—known as ECF—is the lever the regulator uses to let network firms snap up crucial land, kick off initial site prep, and lock in procurement, all before planning permission lands or the finer project points are ironed out. Ofgem made clear it’s holding off on a verdict about total cost efficiency until later reviews; only spending deemed efficient will be recoverable in the end.
Six of the eight projects are onshore reinforcements, with the other two offshore. Among them: upgrades to the Beauly–Loch Buidhe and Loch Buidhe–Spittal 400-kV lines, SSE’s segment of East Coast Onshore Phase 2, and the 2-gigawatt Spittal–Peterhead HVDC subsea connection. There’s also the Western Isles link, running Arnish to Beauly.
Ofgem is eyeing higher early funding for several projects: 30% of BLN4’s costs, 34% for SLU4, 27% on BPNC, 44% for BDUP, and 23% for the Western Isles build. For the remaining three schemes, caps remain tighter—TKUP at 20%, PSDC at 19%, and BBNC at just 14%.
Just days after SSE’s transmission division signed off on Ofgem’s broader RIIO-T3 settlement for the 2026-2031 price-control window—calling the deal both investable and deliverable—the company pointed to progress on 11 major reinforcements. SSE reported that 75% of key planning consents are now secured, with six projects fully consented and five already under construction.
Other companies are also reacting to the regulatory push. On March 2, National Grid confirmed it was taking up the RIIO-T3 framework for its UK electricity transmission division. Ofgem, for its part, launched an early-funding consultation on Feb. 26, focusing specifically on ScottishPower Transmission’s portion of the Tealing-Kincardine upgrade.
SSE has linked its push for regulation with a much bigger bet on its own balance sheet. Back in November, the company rolled out a £33 billion plan spanning five years. Chief Executive Martin Pibworth called it a “once-in-a-generation opportunity” to overhaul key infrastructure. For Jefferies analyst Ahmed Farman, the new plan “brings clarity on the balance sheet” as well as the company’s growth outlook. Reuters
SSE stuck with its 2025/26 adjusted earnings per share outlook—still at 144 to 152 pence—in February. Back then, finance chief Barry O’Regan pointed to management’s push to “accelerate investment” while executing the plan. Reuters
The road ahead looks messy. Ofgem flagged four substations—Hurlie, Emmock, Carnaig, and Fanellan—still in limbo, with SSE appealing after its proposals were knocked back. The regulator also emphasized that early funding doesn’t signal any planning approval, and if a project gets scrapped, whatever hasn’t been spent goes back to consumers.
Ofgem flagged Fanellan as key to half of SHET’s fast-tracked project portfolio, pushing for milestone payments and capped unrecoverable spending until formal consent lands. The regulator set an April 10 deadline for feedback, targeting a decision in May. view0
