Jan. 24 (Bloomberg) -- Iberdrola SA, the world’s biggest investor in wind parks, will spend 2.6 billion pounds ($3.4 billion) upgrading its U.K. electricity grid to handle more power from turbines and curb power costs to consumers.
The investment plan undertaken through its unit Scottish Power Ltd. will allow for grid upgrades to connect about 11 gigawatts more wind energy on land and sea in Scotland, Iberdrola said today in a filing. That’s enough power for about 6 million homes, according to Glasgow-based Scottish Power.
The power lines expansion will double Scottish Power’s export capacity from Scotland to England to 7 gigawatts by 2021, according to Iberdrola. The U.K.’s target to get 15 percent of energy from low-carbon sources by 2020 means power links need to be improved to transport energy produced at remote wind farms on land or offshore to consumers. Scotland plans to get all its electricity from renewables by 2020.
Iberdrola’s proposal, which was fast-tracked for approval by U.K. energy regulator Ofgem, will create 1,500 Scottish jobs and reduce costs to the U.K. consumer by 1.7 billion pounds by 2021, according to the filing.
The upgrades to the network in central and southern Scotland are the most important in more than 50 years, Scottish Power said in a separate statement on its website. They will replace about 800 kilometers (500 miles) of overhead power lines and 15 percent of the existing electricity substations, according to the company.
The plan will also increase the book value of Scottish Power’s electricity transportation network by 220 percent to 3.2 billion pounds, Iberdrola said. About 10 pence a year will be added to the customer’s annual bill as a result of the plan, according to Iberdrola.
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