Energy regulator Ofgem has shortlisted four potential operators for its next Offshore Transmission Owner (OFTO) bidding round for projects worth around £2 billion.
Ofgem has said this is its “biggest ever” offshore transmission tender round and will encompass three offshore transmission links.
The four bidders will be able to bid for the three offshore transmission assets including the Dogger Bank A Offshore Wind Farm (1,400MW), Neart na Gaiothe Offshore Wind Farm (448MW) and Moray Offshore Wind Farm (West) (882MW).
The OFTO for each project will receive a guaranteed revenue stream for up to 25 years under the terms of their licence, subject to the availability of their assets.
The bidding consortiums have been named as Gravis-ITOCHU-UKPN Services Consortium, EKITD Consortium, Diamond Transmission Partners and Transmission Capital Partners.
“As we bring greater numbers of larger OFTO assets to market we are seeing increasing interest from investors and new bidding consortia coming forward. This increasingly competitive field is great for consumers because the extra competitive pressure ultimately helps keep energy costs down,” said Ofgem’s director of networks, Rebecca Barnett.
“Many investors are looking for green, sustainable investments that offer a steady, index-linked income – this is exactly what OFTOs provide. With a stream of multibillion pound OFTO assets coming to market over the next few years there are many opportunities for more investors and consortia to come forward and get involved.”
The OFTO assets could play a vital role in reaching the UK Government’s target of achieving 50GW of offshore wind generation by 2030. A further 5GW is also expected to come from floating offshore wind.
In June, Ofgem called on prospective investors to bid for £7 billion worth of offshore transmission assets that will be auctioned in two bidding rounds in 2024 and 2025.
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.
