Ofgem has called to prospective investors to bid for £7 billion worth of offshore transmission assets that will be auctioned in two bidding rounds in 2024 and 2025.
If targets are met, the estimated ten Offshore Transmission Owner (OFTO) assets are set to provide guaranteed returns for 25 years.
Each OFTO comprises prebuilt transmission connections for offshore wind farms.
So far the OFTO regime has brought investment for 24 assets during its 11 years of operation with several more in process.
The energy regulator has said that over the next two years there will be a surge in OFTOs coming to market as the government draws closer to its 2030 target of increasing offshore wind generation fivefold to 50GW.
“OFTOs are an important part of a multi-billion-pound investment Ofgem is facilitating through its regulation of energy networks. They deliver on energy security and affordability for Britain’s consumers by reducing our reliance on expensive imported fossil fuels. They offer investors attractive index-linked steady returns for 25 years,” said Akshay Kaul, Ofgem interim director, infrastructure and security of supply group.
“Britain already has the highest offshore wind deployment in Europe, and the second highest in the world. With the government’s target of 50GW of offshore wind generation by 2030, there is still huge potential for investors to get in early and be part of an industry that’s set for huge worldwide growth.”
He added: “Investors can also rest assured that Ofgem is ensuring through regulatory reform such as our ASTI (Accelerated Strategic Transmission Investment), Holistic Network Design (HND) and Connections reforms that the necessary onshore infrastructure will be in place.”
