The Minister for Energy (Michael Shanks)
I wish to inform the House that the Department for Energy Security and Net Zero intends to undertake a contingent liability under the statutory spending authority under section 50 of the United Kingdom Internal Market Act 2020. It is a bespoke, time-limited, capped policy indemnity offered by the UK Government to SSEN Transmission to satisfy the Scottish Environment Protection Agency’s permit requirements for SSENT’s Orkney transmission link project, under the Environmental Authorisations (Scotland) Regulations 2018. Upgrading and expanding the grid is critical to the Government’s clean power mission and growth objectives. The project was granted initial regulatory approval by Ofgem in 2019, and final regulatory approval in 2023, and was awarded a marine licence by the Scottish Government in 2020, which was extended in 2022 and 2024. This indemnity will enable the project to proceed, and avoid potential delays, by satisfying a regulatory requirement, subject to SSENT obtaining the necessary permits, ensuring long-overdue progress in connecting Orkney to the GB transmission grid. This critical grid infrastructure will unlock significant clean power capacity that Orkney possesses—including community renewable projects—and bolster security of supply for the islands, helping support a stronger local economy and delivering a more efficient grid for GB consumers which is fit for the future.
It is normal practice when a Government Department proposes to undertake a contingent liability that is novel, contentious or repercussive to present Parliament with a minute, in line with “Managing Public Money”. In line with this guidance, the liability will not be entered into until 14 parliamentary sitting days have elapsed following the laying of the minute.
The indemnity covers the extremely unlikely scenario where SEPA determines that an intervention is required, by virtue of SSENT’s construction activity resulting in a statistically significant increase in irradiated particles washed up onshore from disturbing irradiated particles on the seabed, and that the required intervention is beyond the scope of the Nuclear Restoration Services’ existing particle monitoring and recovery programme. The indemnity is time-limited for 20 years. Due to the extremely remote probability of this risk materialising, it is highly unlikely that this full cost would crystalise. HM Treasury has approved this proposal.
A departmental minute has today been laid before Parliament setting out full details of this contingent liability. In accordance with “Managing Public Money”, the liability will not be entered into until 14 parliamentary sitting days have elapsed following the laying of the minute. Subject to satisfaction of the relevant conditions precedent, the Orkney indemnity will become live as soon as practicable after 14 parliamentary sitting days have elapsed following the laying of the minute.
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