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.
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 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 firstname.lastname@example.org 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.