Six preliminary bids for a 20-year lease to operate the high-voltage cable that will link West of Duddon Sands offshore wind farm with the UK’s onshore electricity network are to proceed to the next stage of competitive tendering.
Announcement of the six ‘longlisted’ bids was made yesterday by UK electricity regulator, Ofgem. Just two companies have won all OFTO tenders to date. Existing OFTO leases are held by dominant player, Transmission Capital Partners, and by Blue Transmission, which last year won the lease for London Array’s first export cable.
Both companies have bid for West of Duddon Sands’ transmission assets. Two of the six bidding companies, Skanska and John Laing Investments, are new entrants to the offshore transmission operator (OFTO) market. The other two longlisted bidders are Balfour Beatty Equitix and National Grid Offshore.
A UK parliamentary committee criticised the process for being uncompetitive earlier this year. Its report also argued that UK offshore wind transmission asset leaseholders enjoy overly generous terms while taking on too little risk for cable failure. These leases represent poor value for money for taxpayers, concluded the committee.
Ofgem has valued the transmission assets for the 389MW West of Duddon Sands project at £311m (€358m). Ownership of the project is shared by Dong Energy and ScottishPower Renewables, with foundation installation due to begin this spring. The European Investment Bank is considering a loan to support the project’s construction.
