Policy paper

Departmental minute: Contingent liability relating to the Orkney Transmission Link project

Published 8 January 2026

Contingent Liability: SSEN Transmission Orkney Link 

1. It is normal practice when a government department proposes to undertake a contingent liability (in this case relying on the spending authority under section 50 United Kingdom Internal Market Act 2020) that is novel, contentious or repercussive for the Minister concerned to present a departmental minute to Parliament, giving particulars of the liability created and explaining the circumstances; and to refrain from incurring the liability until fourteen Parliamentary sitting days after the issue of the Minute, except in cases of special urgency 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.  

2. This Minute gives notice that Department for Energy Security and Net Zero (DESNZ) proposes to undertake a bespoke, time-limited, capped contingent liability in respect of a policy indemnity to Scottish and Southern Electricity Networks Transmission (SSENT) for the Orkney Transmission Link project, in accordance with Managing Public Money. HM Treasury have approved this proposal. 

3. The Orkney Link Transmission project was granted initial regulatory approval by Ofgem in 2019, and final regulatory approval in 2023, and was awarded a marine license by 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 of 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. 

4. The indemnity covers the extremely unlikely scenario where the Scottish Environmental Protection Agency (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’ (NRS’) existing particle monitoring and recovery programme. This is to satisfy a regulatory condition under SEPA’s Environmental Authorisations (Scotland) Regulations 2018, to allow the project to progress, subject to obtaining necessary permits. If the indemnity is called, provision for any payment will be sought through the normal Supply procedure.    

5. Entry is intended from as soon as reasonably practicable after 14 parliamentary sitting days have elapsed following the laying of the minute. The window for claims reflects the 20-year mobilisation window for disturbed particles to reach land, which is approximately April 2028 – May 2048 (subject to the construction window). The indemnity terminates at the end of the claims window, if construction works are cancelled, or if the cap is satisfied.  

6. The maximum exposure is £20m (index linked). This estimate is based on a worst-case scenario whereby the Government is required to meet the full costs of extending monitoring for 20 years. The figure is based on historic UK Government funding of the existing Nuclear Decommissioning Authority and NRS programme per NRS’ current permitted arrangement with SEPA. Due to the extremely remote probability of this risk materialising, it is highly unlikely that this full cost would crystalise.   

7. A Written Ministerial Statement has been made today to notify the House. In accordance with Managing Public Money, the Department will not enter into this liability until 14 parliamentary sitting days have elapsed after the laying of this Minute, to allow for any objections.  

8. The Treasury has approved the proposal. If, during the period of fourteen Parliamentary sitting days beginning on the date on which this Minute was laid before Parliament, a member signifies an objection by giving notice of a Parliamentary Question or by otherwise raising the matter in Parliament, final approval to proceed with incurring the liability will be withheld pending an examination of the objection.