Early Construction Funding (ECF) for Electricity Transmission Projects

Early Construction Funding (ECF) is a mechanism within Ofgem's RIIO (Revenue = Incentives + Innovation + Outputs) price control framework that allows electricity transmission owners to recover costs for pre-construction and early-stage construction activities before a project receives full funding approval under a Large Onshore Transmission Investment (LOTI) or other needs case assessment.

ECF exists because major transmission reinforcements — new pylons, substations, subsea cables — require years of preparatory work (detailed design, planning consents, land rights, early procurement) before the main build starts. Without ECF, transmission owners would either delay this work or carry the cost on their own balance sheet, both of which slow down delivery. ECF lets Ofgem release funding in tranches so that preparatory work proceeds in parallel with the regulatory approval process, rather than waiting for it to finish.

The funding is recovered through Transmission Network Use of System (TNUoS) charges, which means consumers ultimately pay. Ofgem's role is to assess whether the early spending is efficient and whether the project is sufficiently certain to justify committing consumer money before a final investment decision.

This batch represents a single coordinated release on 13 August 2024 covering ECF decisions and consultations for transmission projects across Great Britain. Three projects received final decisions granting ECF and corresponding licence modifications. Two further projects were opened for consultation on proposed ECF.

All five publications involve modifications to Special Condition 3.41 of the relevant transmission owner's electricity transmission licence, which is the licence condition that governs ECF allowances. The projects span Scottish Hydro Electric Transmission (SHE-T), National Grid Electricity Transmission (NGET), and SP Transmission (SPT) licence areas.

Decisions (3)


• Eight Scottish Hydro Electric Transmission projects — Grants ECF and makes corresponding licence modifications for eight SHE-T reinforcement projects, likely including works to accommodate new renewable generation connections in the north of Scotland.

• North London (HWUP) — Approves ECF for the Hackney-Walthamstow Upgrade Project and modifies Special Condition 3.41 of NGET's licence accordingly. This is a reinforcement project in the London power network.

• North West Wales (PTC1 and PTNO) — Grants ECF for two linked projects in the SP Energy Networks / NGET boundary area in North West Wales, covering Pentir-Trawsfynydd and Pentir-North Openreach routes, and modifies the relevant licence condition.

Consultations (2)


• Norwich Tilbury — Consults on ECF for the Norwich to Tilbury reinforcement, a major NGET project to increase power transfer capacity from East Anglia (where offshore wind lands) to demand centres in the south-east.

• TKRE — Consults on ECF and proposed licence modifications for the Torness-Keadby Route Enhancement, a cross-boundary reinforcement linking Scotland to northern England. This is one of the strategic network reinforcements identified in NESO's Holistic Network Design.