Regulator penalises Dong Energy and SSE Renewables

UK: UK energy regulator Ofgem has penalised the developers of the Walney 1 offshore wind farm after the cost of cable installation went £12.8 million over budget.

The regulator has ruled that £6.4 million of the cost overrun will have to be met by developers Dong Energy and SSE Renewables, removing the sum from the price to be paid by the offshore transmission network operator (OFTO) preferred bidder, Australian bank Macquarie Capital Group.

Under UK rules OFTOs are entitled to earn a regulated rate of return on the costs of building and operating networks for a period of 20 years.

The Ofgem report suggested that the developers and their contractors may have "underestimated the hard and difficult seabed conditions" between the site in the Irish Sea, 15 kilometres south-west of the coast of Cumbria in north-west England, and the cable landfall on the coast near Barrow, Cumbria.

Walney 1 has a planned generation capacity of 367MW, powered by 51 Siemens turbines.

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