Ofgem shortlists six companies to run £1billion offshore grid assets

ENGLAND: Six companies have been shortlisted to run the high voltage transmission links for over 2000 MW of offshore wind farms (see table below).

Walney: one of the assets in the bidding process (pic: Junklight)
Walney: one of the assets in the bidding process (pic: Junklight)

The firms are bidding to own and operate the offshore grid assets worth more than £1 billion to connect nine wind farms to the onshore grid.

This is the first phase of the UK’s new offshore wind transmission regime—a £15 billion programme that eventually could link up to 33 GW of offshore wind capacity.

The competition is being run by Ofgem E-Serve—the arm of energy regulator Ofgem responsible for its environmental programmes.

In May 2010, it hopes to announce the winning bidders who will take over ownership of the transmission links once they are built and will then run them for 20 years, receiving a stable regulated income.

Ofgem’s chief executive Alistair Buchanan said: "The strong competition for the first round of transmission links demonstrates the value of attracting new entrants and shows that firms have confidence in the tendering process and are willing to make a substantial investment.

"This is vital if the £15 billion needed to connect the Government’s target of 33 gigawatts of offshore wind is to be raised in these difficult financial circumstances."

The European Investment Bank (EIB) is considering providing up to £300 million of funding for first phase connections to six projects sited furthest from shore (Windpower Monthly, December 2009).

A second tender process to connect the next round of offshore wind projects is due to begin next summer. But under subsequent tenders for what is known as the "enduring regime", investors will bid to design, build and finance the transmission links as well as operating them.

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