To compete or not on offshore wires

Should there be competition in providing offshore grid connections, or should the UK adopt a similar approach to connection of electricity generating plant on land and make a single transmission owner responsible for all connections within a geographical offshore area? These are the choices being offered the wind industry by energy regulator Ofgem and the Department of Trade and Industry (DTI), which has launched a public consultation on the topic.

Ofgem, a champion of competitive markets, favours the first "non-exclusive" option requiring companies to compete for a licence to build, own and operate offshore transmission connections to deliver them in the most cost efficient, timely and certain manner. The DTI is not publicly stating a preference until it sees the industry's response to Ofgem's proposal. The consultation ends January 8, with a government ruling expected in early 2007.

Existing offshore wind farms from the first round of near shore development connect into the local distribution network. The new licensing regime will apply to a small number of round one projects yet to be built, which will connect into the 132 kV network, and to all the projects being developed under the second offshore round of bigger wind farms sited further out to sea, totalling some 7 GW.

The licensing regime is expected to go live in mid 2008. By then, however, a few of the more advanced round two developers will be progressing their own connections. The British Wind Energy Association's Gordon Edge says the way to deal with this problem is to press a commitment out of government for the eventual transmission owner to takeover those connection assets. "It is essential to give the early movers confidence to build those links in the knowledge that they can later sell them on to a regulated owner," he says.