- Publication date
- 20th August 2014
- Information type
- Policy area
- Strong competition to own and operate over £400 million of high-voltage transmission links for two offshore wind farms
- First round under the new enduring regulatory regime, designed to achieve further savings for consumers
Ofgem has today announced a short list of four bidders competing to own and run transmission links to two offshore windfarms. They are both located in the North Sea off the coast of Yorkshire.
The shortlisted bidders go through to the final bid stage where Ofgem will appoint the Offshore Transmission Owner (OFTO) for each project, who will be granted a licence to own and operate the transmission links. The OFTOs will receive a guaranteed revenue stream for 20 years under the terms of their licence, subject to availability of the assets.
The Westermost Rough and Humber Gateway projects are being tendered under the third tender round of the OFTO regime, which totals c. £400m of transmission assets. It is the first tender round under the new enduring regulatory regime. Since it was set up by Ofgem and the Department of Energy and Climate Change (DECC) in 2009, the regime has attracted £1.4 billion of investment and led to significant savings for consumers. A further £1.5 billion of transmission assets (inclusive of this third tender round) are currently in the tender process, with billions more in the pipeline.
The following bidders have been shortlisted:
- 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)
Ofgem expects to announce details of the preferred bidders for the Westermost Rough and Humber Gateway in 2015.
Notes to editors
1. The offshore regulatory regime, developed by DECC and Ofgem, was launched in 2009 and uses competitive tendering for licensing offshore electricity transmission. The regime is being delivered in two parts, transitional and enduring. The transitional regime involved two tender rounds (Tender Round 1 and 2), which opened the way for transmission licencees to own and operate transmission assets for offshore renewable projects that have been or are being constructed by an offshore generator.
Tender Round 3 falls under the enduring regime, which enables Ofgem to run tenders for projects where:
- offshore Transmission Owners (OFTOs), design, build, operate and maintain the transmission assets; or
- generators build the transmission assets and then transfer them to OFTOs at construction completion.
2. 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 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.
3. Humber Gateway offshore wind farm is owned by E.ON Climate & Renewables UK. Located off the Yorkshire coast, it will have 73 wind turbines capable of producing 220 MW. The transmission system 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.
4. For more information on offshore transmission see the offshore section of our website.
5. For more information on the new features designed to keep the cost of transmission investment as low as possible for consumers, please see our recent statement on generator build tenders. For more information on the pipeline of offshore wind power, see the Department of Energy and Climate Change Renewable Energy Roadmap.
Ofgem is the Office of the Gas and Electricity Markets, which supports the Gas and Electricity Markets Authority, the regulator of the gas and electricity industries in Great Britain. The Authority's functions are set out mainly in the Gas Act 1986, the Electricity Act 1989, the Competition Act 1998 and the Utilities Act 2000. In this note, the functions of the Authority under all the relevant Acts are, for simplicity, described as the functions of Ofgem.
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