The money will fund construction of the most urgently needed upgrades and pre-construction work for all projects that the three British system operators - National Grid, ScottishPower and Scottish and Southern Energy subsidiary Scottish Hydro-Electric Transmission Limited (SHETL) - have identified as being required by 2020. Ofgem calls it a "20% down payment" on the total £5 billion of grid investment needed to meet the UK's renewable energy targets. Over 70% of the £1 billion is earmarked for Scotland where, in addition to onshore upgrades, SHETL has proposed subsea connections to the Western and Shetland Isles. One of the projects likely to benefit from pre-construction studies is a west-coast subsea high-voltage direct-current link running between Scotland and north Wales. Consultants employed by Ofgem are not convinced this £780 million link will be needed within the 2020 timescales, but the regulator's proposals would enable £93 million of pre-construction work to go ahead. The remaining 80% of the construction programme will come under a new incentives regime. From 2012, the new regime will be in place to encourage system operators to invest in the wires ahead of time.
