IPPToday #31: Preferred Bidder selected for Burbo Bank OFTO
- HICL Infrastructure Company Ltd
- Mitsubishi Corporation
- Dalmore Capital Ltd
- Macquarie Group
- Frontier Power Limited
- International Public Partnerships (INPP)
- Amber Infrastructure Limited
- Transmission Investment
- Balfour Beatty Infrastructure Partners
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Diamond Transmission Partners, a consortium comprising HICL Infrastructure and Diamond Transmission Corporation (DTC), a subsidiary of Mitsubishi Corporation, has been selected as the preferred bidder for a new offshore electricity transmission link in UK.
The new offshore electricity asset, Burbo Bank Extension Offshore Wind Farm, is situated approximately 25 km off the country’s northwestern coast. Connected to the Bodelwyddan substation in Denbighshire, North Wales, the project consists of one subsea cable, one land cable, one offshore substation and one onshore substation. The asset has a transmission capacity of up to 258 MW and is valued at £180 million (US$237 million).
The consortium will execute this electricity transmission business for a 20-year period starting around the end of 2017, following successful acquisition of the asset and the granting of an Offshore Transmission Owner (OFTO) license by the UK’s Office of Gas and Electricity Markets (Ofgem).
As we reported in September 2016, Ofgem announced a shortlist of five bidders. The other four bidders shortlisted were:
- Balfour Beatty Equitix Consortium (a consortium comprising Balfour Beatty Investments Ltd and Equitix Ltd)
- Dalmore Capital Limited (acting in its capacity as manager of the PPP Equity PIP LP)
- Mari Energy Transmission (consortium comprising Macquarie Corporate Holdings Pty Ltd and Frontier Power Ltd)
- Transmission Capital Partners (consortium comprising International Public Partnerships Ltd and Transmission Capital Partners Ltd Partnership, a joint venture formed between Amber Infrastructure Limited and Transmission Investment LLP)
DTC was established as an MC subsidiary in the UK in 2013 in order to ensure that the company’s transmission assets across Europe are managed efficiently. DTC carry out technical operations and maintenance as well as provide accounting and other services, with the support of professionals dispatched from MC.
The current bid was the first to be led by DTC, which drew on its extensive experience in the offshore transmission business, particularly as it relates to the design of the bid and all aspects of asset management strategy, including commercial and technical delivery.
Europe expects to generate some 50 GW of offshore wind power capacity by 2030 and stablilisation of power transmission systems is becoming more and more important as power generation from renewable sources rises. The companies see this as an opportunity to develop businesses that help reduce greenhouse gas emissions, thereby contributing to the generation of economic, environmental and social value.
HICL and DTC have also partnered to participate in phase one of Tender Round 5, which comprises three further bids for OFTO assets.
We have lately informed about other transmission projects in UK:
- Transmission project for the Walney Extension offshore wind farm
- Transmission project for the Galloper offshore wind farm project
- Offshore transmission link to the Humber Gateway wind farm
- Offshore transmission link to the Westermost Rough windfarm (OFTO)