In 2024, 10 per cent of wind generated power was curtailed, enough to power two million homes. The B6 boundary – the interface between the Scottish and English transmission network - is currently the most constrained transmission boundary in Great Britain.  NWF’s £600m investment announced today to support the upgrade of seven grid transmission projects, including at this boundary, will contribute towards reducing occasions where energy is wasted. By allowing more green electrons to flow from renewable generation in Scotland to demand in the South, the associated cost to billpayers and emissions are reduced, as we avoid the dual cost of turning off green energy (wind farms) and switching on “brown” electrons (such as gas).  

But our role goes much further than the £600m we’re committing to ScottishPower’s upgrades, specifically by both crowding in private finance and widening the sources of capital open to this sector in the longer-term. 

Our need to be additional and mobilise private finance through our investments has long been hardwired into our approach. We have worked hard to ensure that NWF is adding value on a deal-by-deal basis, always looking to crowd in, and not crowd out, private investment. In this transaction, we sit alongside a robust line-up of private investors including Bank of America, BankInter, BNP Paribas, Caixabank, Lloyds Bank, NatWest and Sabadell, in a co-lending facility which was put in place to mobilise private capital into this sector.  The total package for this particular transaction is £1.35bn and, Iberdrola (Scottish Power’s parent company) has confirmed plans to invest £24bn in the UK’s electricity network and renewable generation infrastructure between now and 2028.   

To put this into perspective, National Energy System Operator (NESO) estimates that up to £60 billion of investment is required in the years to 2030 to support the delivery of a clean power system. The pace at which this investment needs to be deployed will place considerable pressure on many areas of the supply chain. The good news is, this creates the potential for further growth and jobs to be created – and NWF stands ready to invest throughout the value chain to help make this a reality.  

However, the sheer scale of investment required to upgrade our grid here in the UK means that there is no single source of capital capable of solving the problem. Every avenue needs to be explored if we are to unlock the grid and put the clean energy we are producing to good effect. In our recent Statement of Strategic Priorities, HM Treasury asked us to look not only at whether individual deals could have happened without us, but at investment needs at a sectoral level and addressing future market weaknessiv. 

To that end, we expect our involvement in this transaction to not only mobilise further investment at a transaction level, but to also help widen the sources of capital open to this sector. In the future, we have scope to be additional in multiple ways, for example, demonstrating commercial viability of nascent technologies, supporting subsidy-free commercial models and providing liquidity to sectors where ramp up is needed to achieve government ambitions.  

As a public finance institution, we also benefit from flexibility in the products we can offer and agility to adapt to resolve and repair market weakness. We know there is a lack of long-dated liquidity in the bank market, and a lack of flexibility within the bond markets. In this particular case, the longer tenor of our facility allows Scottish Power to better align the debt profile with the life of the assets being financed and the long-term repayment profile set by Ofgem.  

Today’s investment is a significant step forward, and we look forward to continuing to work in partnership with the public and private sectors to unlock capital to reduce congestion costs, and ultimately, lower the cost of electricity for businesses and consumers across the UK. 

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