Last week the UK Office of the Gas and Electricity Markets (Ofgem) appointed Blue Transmission as the preferred bidder to own and operate the offshore transmission links to the West of Duddon Sands windfarm.
Blue Transmission, a consortium comprising Macquarie Capital Group Limited, 3i BIFL Investments Limited and Frontier Power Limited, was selected by Ofgem through a competitive process in which bidders compete to become offshore transmission owners (OFTOs). This means they will own and operate the cable and other transmission equipment.
The West of Duddon Sands Offshore Wind Farm, located in the East Irish Sea, comprises 108 wind turbines with a total installed capacity of 389MW. The estimated value of the transmission assets is £296 million.
The West of Duddon Sands transmission assets were tendered under the second transitional tender round of the OFTO regime. Since the regime was set up by Ofgem and the Department of Energy and Climate Change (DECC) in 2009 it has attracted £1.4 billion of investment and led to significant savings for consumers. A further £1.5 billion of transmission assets are currently in the tender process, with billions more in the pipeline.
Blue Transmission will design, build, operate and maintain the West Duddon Sands windfarm’s transmission system for the next 20 years.
During the years 2012 to 2014, through a joint venture with ScottishPower Renewables, DONG Energy are constructing the West of Duddon Sands Offshore Wind Farm.
The offshore regulatory regime was developed by DECC and Ofgem and was launched in 2009. The regime, now fully commenced, is for licensing offshore electricity transmission and uses competitive tendering to ensure that the cable connections are delivered on time and at a reasonable cost. It is the first time that Ofgem has used competitive tendering in this way.