Tender Round 3

February 2014 saw the launch of Tender Round Three (TR3). This marked a key milestone for the Offshore Transmission regime as it is the first tender round to be run under the enduring regime.

Worth approximately £400m in total, the transmission assets of two offshore wind farms are being tendered during this tender round. Both are projects where the wind farm generator has built the assets.

On 20 August, we published details of the shortlisted bidders for Tender Round 3.

Project snapshot

Westermost Rough

Westermost Rough offshore wind farm is owned by WMR Limited, part of DONG Energy A/S. Situated in the North Sea off the coast of Yorkshire, the wind farm has 35 wind turbines capable of producing a total 205 megawatts (MW) of electricity. The transmission system, which is currently valued at £172.3m, is being constructed by the offshore wind farm owner and will include an offshore substation platform, offshore and onshore AC export cables and an onshore substation. The transmission system is currently being tendered by Ofgem who will appoint an Offshore Transmission Owner (OFTO) to own and operate it.

 

On 20 August 2014, following the enhanced pre-qualification stage of the tender, four qualifying bidders were announced:

•             Balfour Beatty Equitix Consortium (a bidder group comprising Balfour Beatty Investments Ltd and Equitix Ltd)

•             Blue Transmission Consortium (a bidder group comprising 3i Investments Plc and Mitsubishi Corporation

•             Mari Energy Transmission (a bidder group comprising Macquarie Capital Group Ltd and Frontier Power)

•             Transmission Capital Partners (a bidder group comprising Transmission Capital Partners Ltd Partnership  and International Public Partnerships Ltd)

 

On 22 October 2014 we started the next stage in the tender process,  the Invitation to Tender (ITT) stage. Ofgem will evaluate the ITT bids before appointing a Preferred Bidder for the project in Spring 2015. The wind farm owner and the Preferred Bidder will then work together to reach financial close and asset transfer. Once this has taken place Ofgem will grant an Offshore Transmission Owner (OFTO) licence and the OFTO will own and operate the Westermost Rough transmission system for the next 20 years.

Humber Gateway

Humber Gateway offshore wind farm is owned by E.ON Climate & Renewables UK. Located off the East Yorkshire coast, it will have 73 wind turbines capable of producing 220 MW. The transmission system will include an offshore substation platform, offshore and onshore AC export cables and an onshore substation.

If you are interested in participating in the tender process please contact us at tendercoordinator@ofgem.gov.uk for further information.

What’s new about the enduring regime?

For TR3 we have looked at lessons learnt from previous tender rounds and decided to combine the Pre-Qualification (PQ) and Qualification to Tender (QTT) stages into one Enhanced Pre-Qualification (EPQ) stage. This will make the tender process simpler and quicker for all parties involved.

Although the TR3 projects are being built by offshore generators, using the generator build model, the enduring regime also gives generators the choice of an Offshore Transmission Owner (OFTO) designing and constructing the transmission assets (the OFTO build model).

TR3 Launch event

On 26 February we held an event to launch TR3, which was attended by over 100 delegates.  At the event we provided stakeholders with an update on latest regime developments, the tender process, and opportunities to invest in the OFTO sector.

To find out more about what was discussed please view the presentation from the event.

 

Publications and updates

  • Published: 20th Apr 2017
  • Open letters and correspondence
  • 1 Associated documents
This letter sets out the Authority’s decision regarding the repayment of the excess funds following the TR3 aggregation exercise.

  • Published: 15th May 2015
  • Decisions
  • 1 Associated documents
This notice under 20(1) of the Electricity (Competitive Tenders for Offshore Transmission Licences) Regulations 2013 announces that Ofgem has appointed the Preferred Bidder for the Westermost Rough project.

  • Published: 22nd Oct 2014
  • Open letters and correspondence
  • 1 Associated documents
This letter updates our position on alternative credit rating arrangements in order to be consistent with the current drafting of standard condition E11 and consent we have given to offshore transmission owners to date.

  • Published: 1st Apr 2014
  • Guidance
  • 1 Associated documents
The next steps a Bidder should take for participating in the Enhanced Pre-Qualification (EPQ) Stage of Tender Round 3 (TR3).

  • Published: 31st Mar 2014
  • Guidance
  • 1 Associated documents
This Enhanced Pre-Qualification Document (EPQ Document) sets out the requirements Bidders need to demonstrate in order to be invited to participate in the Invitation to Tender (ITT) Stage of Tender Round 3 (TR3).

  • Published: 28th Mar 2014
  • Other
  • 1 Associated documents
The Authority hereby gives notice pursuant to regulation 11(1) of the Tender Regulations of its intention to commence a tender round in respect of the projects on 31 March 2014.

  • Published: 7th Mar 2014
  • Decisions
  • 3 Associated documents
We have published a revised OFTO licence for Tender Round 3. The decision letter summarises responses to the consultation, sets out key changes to the licence drafting and confirms our approach to evaluating biddable indexation.

  • Published: 28th Feb 2014
  • Guidance
  • 1 Associated documents
This document is a summary of the information provided by the developer and outlines specifically the opportunity for investors to acquire the transmission assets and to become the licensed Offshore Transmission Owner of the Westermost Rough wind farm.

  • Published: 28th Feb 2014
  • Guidance
  • 1 Associated documents
This document is a summary of information provided by the developer and outlines specifically the opportunity for investors to acquire the transmission assets and to become the licensed Offshore Transmission Owner of the Humber Gateway wind farm.

  • Published: 28th Feb 2014
  • Guidance
  • 1 Associated documents
This generic Preliminary Information Memorandum for Tender Round 3 outlines an opportunity for investors to acquire electricity transmission assets under the regulatory regime governing the ownership and operation of offshore electricity transmission.

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