Ofgem consults on further EGL3 early funding

Ofgem has opened a consultation on further early construction funding for Eastern Green Link 3, the proposed 2GW electricity transmission connection between Peterhead in Scotland and Walpole in Norfolk. The application covers strategic land purchases, enabling works and procurement commitments that the developers want to progress ahead of full project approvals. The consultation opened on 30 October 2026 and is scheduled to close on 30 November.

National Grid Electricity Transmission and Scottish Hydro Electric Transmission submitted this second application under Ofgem’s Accelerated Strategic Transmission Investment arrangements. Each company is responsible for elements of the cross-border scheme, and the funding mechanism is governed by the specific conditions of their electricity transmission licences. The consultation therefore concerns which preparatory expenditure should be permitted while design, planning and procurement continue for a project intended to increase electricity transfer between Scotland and England.

Early funding can allow developers to obtain land rights, undertake preparatory construction activity or commit to equipment orders before all subsequent decisions are in place. The sequence is particularly important on high-voltage projects, where major electrical plant and cable systems can have long manufacturing lead times. Securing a production slot or access to a necessary site may influence the construction programme, but it also exposes consumers to costs if a project changes materially or does not proceed as envisaged.

Ofgem is considering whether the timing and scale of the proposed commitments represent an efficient use of regulated funding, particularly where expenditure may become irrecoverable if the project is materially changed. Early construction funding provides a route to start specified activities before the remaining statutory approvals are complete. Planning authorities retain responsibility for consent decisions, while Ofgem’s determination addresses the consumer-cost exposure associated with the developers’ proposed early work.

EGL3 is planned as a high-voltage direct current link with a transfer capability of up to 2GW. It will connect the Peterhead area in Aberdeenshire with a proposed new Walpole B substation in Norfolk through a combination of subsea and onshore cables and converter stations. Those converter stations would allow electricity to move between the alternating current networks and the direct current transmission circuit. The engineering arrangement provides controllable, long-distance bulk-power transfer, with its operating limits ultimately determined by converter capability, cable ratings and surrounding grid conditions.

The proposed English landfall and onshore infrastructure are being developed alongside Eastern Green Link 4, a separate 2GW connection from eastern Scotland. National Grid’s plans envisage underground HVDC cables from the Lincolnshire coast towards converter stations near Walpole, with the two schemes connecting through a proposed Walpole B substation. The associated Grimsby-to-Walpole reinforcement forms part of the broader onshore network design. Both projects require suitable converter, cable and substation infrastructure before their rated transfer capacities can be used within the existing alternating current system.

A previous Ofgem decision in December 2025 approved updated delivery dates and early investment arrangements for EGL3, EGL4 and the Grimsby-to-Walpole connection. The current application builds on that earlier regulatory work and seeks another defined category of preparatory expenditure. Its outcome will determine the scope of costs that the transmission owners may progress at this stage; the detailed development consent and later construction milestones follow separate procedures.

Converter transformers, high-voltage cables and power electronic equipment have manufacturing and testing stages that must be matched to the overall construction programme. An early procurement commitment may secure capacity in a supplier’s factory schedule, but the final equipment interfaces still need to align with the evolving substation and cable designs. Ofgem’s assessment therefore covers the financial exposure created by commitments made ahead of the remaining consents, when design changes could affect the items ordered or their delivery dates.

Strategic land purchases and enabling works create a related set of delivery obligations. Access arrangements, surveys and preliminary site preparation can be coordinated in advance, while the locations and permitted scope of later construction remain subject to the relevant planning and environmental processes. The developers must account for these dependencies when defining the expenditure for which early recovery is sought. The regulator will consider how much risk should fall on network consumers if later revisions change the expected use of land or procured equipment.

Responses to the consultation are invited until 30 November 2026 from transmission operators, affected communities, consumer groups and other interested parties. Ofgem will consider those submissions before determining the second early construction funding request. The decision will establish the permitted treatment of the proposed land, enabling and procurement costs, while the project’s planning and construction programme continues through its own milestones.