Guidance on the Offshore Transmission Owner (OFTO) of Last Resort mechanism
Guidance
Publication date
Industry sector
Offshore Transmission Network
We expect that the Offshore Transmission Owners (OFTOs) we appoint will perform to high standards and meet the requirements of users. However, in specific circumstances, such as the unlikely situation that an OFTO business fails, there is a risk of the generator becoming stranded and unable to export electricity to the onshore transmission network. To mitigate this risk, we introduced the OFTO of Last Resort mechanism, which allows us to appoint an OFTO outside of the competitive tender process. However we would only expect to use the OFTO of Last Resort process once other options for ensuring ongoing transmission have been exhausted, including:
- proactively engaging with the incumbent OFTO (including discussions with funders) to resolve any issues before they prevent them from continuing as the OFTO
- taking enforcement action to rectify performance issues and ensure licence compliance
- Energy Administration
- retendering the assets
- the OFTO selling/transferring the assets on the open market.
This guidance provides more detail on the options listed above and also outlines the OFTO of Last Resort mechanism and steps we would expect to take to appoint an OFTO of Last Resort, focusing on the scenario where an OFTO business has failed.