Fifth OFTO tender round kicks off

Ofgem has announced its fifth, and biggest, tender round for offshore transmission owners (OFTOs) will kick off on 10 October.

5th October 2016 by Networks

The round will allow companies bid to become owners of five transmission links to offshore windfarms, which have an estimated value of £2 billion in total and a generation capacity of 2.3GW.

Ofgem senior partner, networks, Jonathan Brearley, said: “Since the launch of the OFTO regime, the first three tendering rounds have delivered £700 million in savings and have attracted over £3 billion in investment value.

“By providing the opportunity for investors to now participate in the tendering of over £2 billion of assets in the next round, it should ensure the delivery of further value for consumers and contribute to reducing the overall cost of offshore wind.”

The five offshore windfarms for which transmission links are being tendered are Dudgeon, off Cromer in Norfolk; Galloper, off the East Coast of England; Race Bank in the northern reaches of The Wash off the Norfolk coast; Rampion near Sussex and the Walney Extension in the Irish Sea.

Ofgem released the shortlist of five bidders competing to own and run the £230 million transmission link to the Burbo Bank Extension windfarm this month. The Burbo Bank Extension is being tendered through the fourth round of the OFTO regime, and the preferred bidder will be announced in April 2017.

The regime was launched by Ofgem in 2009 and uses competitive tendering for licensing offshore electricity systems. The first three tender rounds brought several new players into the UK transmission market.

The OFTO regime also offers a range of organisations including UK life insurers and pension funds opportunities to invest in long-term infrastructure.