UK energy regulator launches US$2.6 billion transmission tender

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UK energy regulator launches US$2.6 billion transmission tender

The UK government's Office of Gas and Electricity Markets (Ofgem) has launched the sixth round of the offshore transmission owner regime, which uses competitive tendering to license offshore electricity transmission. The tender covers links to three offshore wind farms with an estimated total value of GBP2 billion (US$2.62 billion).

The tender includes the electricity transmission link to the 1.2 GW Hornsea 1 wind farm off the coast of Lincolnshire and Yorkshire, set to be the world’s largest offshore wind farm once complete. Ørsted is the lead developer, though last month the company signed an agreement to sell a 50% stake to Global Infrastructure Partners (GIP)

The other tenders are for the ownership of links to the 588 MW Beatrice wind farm off the coast of Scotland and the 714 MW East Anglia One wind farm off the coast of East Anglia. 

The former is owned by a joint venture between Copenhagen Infrastructure Partners, SDIC Power and SSE. East Anglia One is being developed by ScottishPower Renewables.

The transmission systems for the wind farms are currently being constructed by their respective developers and will be transferred to the winning bidders to own and operate as part of the tender process. The systems will include offshore substation platform(s), offshore and onshore AC export cables, and an onshore substation. 

The tenders will open at the end of October.

Since Ofgem and the UK government launched the offshore transmission owner regime in 2009, winning bidders have so far invested GBP3 billion (US$3.93 billion) in links connecting 4.6 GW of offshore wind farms. Ofgem estimates that at least GBP700 million (US$ 916.9 million) in savings were achieved for consumers across the first three tender rounds.

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